How Should Investors React To Saga plc’s (LON:SAGA) CEO Pay?

In 2014 Lance H. Batchelor was appointed CEO of Saga plc (LON:SAGA). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

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Check out our latest analysis for Saga

How Does Lance H. Batchelor’s Compensation Compare With Similar Sized Companies?

According to our data, Saga plc has a market capitalization of UK£551m, and pays its CEO total annual compensation worth UK£1.2m. (This is based on the year to January 2019). That’s a notable increase of 16% on last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at UK£690k. When we examined a selection of companies with market caps ranging from UK£316m to UK£1.3b, we found the median CEO total compensation was UK£883k.

It would therefore appear that Saga plc pays Lance H. Batchelor more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see a visual representation of the CEO compensation at Saga, below.

LSE:SAGA CEO Compensation, May 24th 2019
LSE:SAGA CEO Compensation, May 24th 2019

Is Saga plc Growing?

Saga plc has reduced its earnings per share by an average of 36% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down -3.0%.

Sadly for shareholders, earnings per share are actually down, over three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has Saga plc Been A Good Investment?

Given the total loss of 73% over three years, many shareholders in Saga plc are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

We examined the amount Saga plc pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.

Just as bad, share price gains for investors have failed to materialize, over the same period. And we’d be remiss not to note that the CEO remuneration has increased on last year. This analysis suggests to us that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Saga.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.