Is John Wood Group PLC’s (LON:WG.) CEO Incentives Align With Yours?

Robin Watson has been the CEO of John Wood Group PLC (LON:WG.) since 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for John Wood Group

How Does Robin Watson’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that John Wood Group PLC has a market cap of UK£5.2b, and is paying total annual CEO compensation of US$1m. Notably, that’s an increase of 21% over the year before. We looked at a group of companies with market capitalizations from UK£3.1b to UK£9.2b, and the median CEO compensation was UK£2m.

A first glance this seems like a real positive for shareholders, since Robin Watson is paid less than the average compensation paid by similar sized companies. While this is a good thing, you’ll need to understand the business better before you can form an opinion.

Is John Wood Group PLC Growing?

John Wood Group PLC has reduced its earnings per share by an average of 145% a year, over the last three years. In the last year, its revenue is up 114%.

As investors, we do are a bit wary of companies that have lower earnings per share, over three years. On the other hand, the strong revenue growth suggests the business is growing. It’s hard to reach a conclusion about business performance right now. This may be one to watch.

You might want to check this free visual report on analyst forecasts for future earnings.

Has John Wood Group PLC Been A Good Investment?

With a total shareholder return of 22% over three years, John Wood Group PLC shareholders would, in general, be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.

In Summary…

It appears that John Wood Group PLC remunerates its CEO below most similar sized companies.

Robin Watson is paid less than what is normal at similar size companies, and but overall performance has left me uninspired. So shareholders may not be elated, but they shouldn’t be worried about the CEO compensation, either. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at John Wood Group PLC.

Or you might prefer this data-rich interactive visualization of historic revenue and earnings.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.