This Is Why Auto Trader Group plc's (LON:AUTO) CEO Can Expect A Bump Up In Their Pay Packet

Key Insights

• Auto Trader Group's Annual General Meeting to take place on 14th of September
• Total pay for CEO Nathan Coe includes UK£592.0k salary
• The overall pay is 30% below the industry average
• Over the past three years, Auto Trader Group's EPS grew by 4.8% and over the past three years, the total shareholder return was 11%

Shareholders will be pleased by the robust performance of Auto Trader Group plc (LON:AUTO) recently and this will be kept in mind in the upcoming AGM on 14th of September. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. Here is our take on why we think CEO compensation is fair and may even warrant a raise.

Check out our latest analysis for Auto Trader Group

Comparing Auto Trader Group plc's CEO Compensation With The Industry

According to our data, Auto Trader Group plc has a market capitalization of UK£5.5b, and paid its CEO total annual compensation worth UK£1.3m over the year to March 2023. That's a notable decrease of 23% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at UK£592k.

On examining similar-sized companies in the British Interactive Media and Services industry with market capitalizations between UK£3.2b and UK£9.6b, we discovered that the median CEO total compensation of that group was UK£1.8m. That is to say, Nathan Coe is paid under the industry median. Furthermore, Nathan Coe directly owns UK£19m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	UK£592k	UK£577k	46%
Other	UK£689k	UK£1.1m	54%
Total Compensation	UK£1.3m	UK£1.7m	100%

Speaking on an industry level, nearly 80% of total compensation represents salary, while the remainder of 20% is other remuneration. Auto Trader Group pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Auto Trader Group plc's Growth

Auto Trader Group plc's earnings per share (EPS) grew 4.8% per year over the last three years. Its revenue is up 16% over the last year.

We think the revenue growth is good. And the improvement in EPSis modest but respectable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. 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 Auto Trader Group plc Been A Good Investment?

Auto Trader Group plc has generated a total shareholder return of 11% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

Overall, the company hasn't done too poorly performance-wise, but we would like to see some improvement. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

Whatever your view on compensation, you might want to check if insiders are buying or selling Auto Trader Group shares (free trial).

Switching gears from Auto Trader Group, 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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.