Shareholders Will Probably Hold Off On Increasing Devro plc's (LON:DVO) CEO Compensation For The Time Being

Under the guidance of CEO Rutger Helbing, Devro plc (LON:DVO) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 29 April 2021. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Devro

Comparing Devro plc's CEO Compensation With the industry

At the time of writing, our data shows that Devro plc has a market capitalization of UK£331m, and reported total annual CEO compensation of UK£734k for the year to December 2020. That's a notable increase of 39% on last year. Notably, the salary which is UK£456.0k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations ranging from UK£144m to UK£578m, the reported median CEO total compensation was UK£521k. Hence, we can conclude that Rutger Helbing is remunerated higher than the industry median. Moreover, Rutger Helbing also holds UK£188k worth of Devro stock directly under their own name.

Speaking on an industry level, nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. Devro sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Devro plc's Growth

Devro plc has seen its earnings per share (EPS) increase by 14% a year over the past three years. Revenue was pretty flat on last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Devro plc Been A Good Investment?

Devro plc has not done too badly by shareholders, with a total return of 3.3%, over three years. It would be nice to see that metric improve in the future. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 1 warning sign for Devro that investors should be aware of in a dynamic business environment.

Switching gears from Devro, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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