Shareholders Will Probably Not Have Any Issues With Reach plc's (LON:RCH) CEO Compensation

Key Insights

• Reach to hold its Annual General Meeting on 2nd of May
• CEO Jim Mullen's total compensation includes salary of UK£504.0k
• Total compensation is 34% below industry average
• Reach's EPS grew by 78% over the past three years while total shareholder loss over the past three years was 62%

Performance at Reach plc (LON:RCH) has been rather uninspiring recently and shareholders may be wondering how CEO Jim Mullen plans to fix this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 2nd of May. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

View our latest analysis for Reach

How Does Total Compensation For Jim Mullen Compare With Other Companies In The Industry?

Our data indicates that Reach plc has a market capitalization of UK£218m, and total annual CEO compensation was reported as UK£564k for the year to December 2023. This means that the compensation hasn't changed much from last year. Notably, the salary which is UK£504.0k, represents most of the total compensation being paid.

For comparison, other companies in the British Media industry with market capitalizations ranging between UK£80m and UK£320m had a median total CEO compensation of UK£858k. Accordingly, Reach pays its CEO under the industry median. Furthermore, Jim Mullen directly owns UK£513k worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	UK£504k	UK£501k	89%
Other	UK£60k	UK£60k	11%
Total Compensation	UK£564k	UK£561k	100%

Speaking on an industry level, nearly 55% of total compensation represents salary, while the remainder of 45% is other remuneration. According to our research, Reach has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Reach plc's Growth

Reach plc's earnings per share (EPS) grew 78% per year over the last three years. It saw its revenue drop 5.4% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Reach plc Been A Good Investment?

With a total shareholder return of -62% over three years, Reach plc shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The loss to shareholders over the past three years is certainly concerning. The share price trend has diverged with the robust growth in EPS however, suggesting there may be other factors that could be driving the price performance. There needs to be more focus by management and the board to examine why the share price has diverged from fundamentals. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for Reach (1 shouldn't be ignored!) that you should be aware of before investing here.

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

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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.