Stock Analysis

It Looks Like Shareholders Would Probably Approve Dechra Pharmaceuticals PLC's (LON:DPH) CEO Compensation Package

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It would be hard to discount the role that CEO Ian Page has played in delivering the impressive results at Dechra Pharmaceuticals PLC (LON:DPH) recently. Shareholders will have this at the front of their minds in the upcoming AGM on 21 October 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is not extravagant.

View our latest analysis for Dechra Pharmaceuticals

Comparing Dechra Pharmaceuticals PLC's CEO Compensation With the industry

At the time of writing, our data shows that Dechra Pharmaceuticals PLC has a market capitalization of UK£5.2b, and reported total annual CEO compensation of UK£2.6m for the year to June 2021. That's a notable increase of 64% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at UK£551k.

On examining similar-sized companies in the industry with market capitalizations between UK£2.9b and UK£8.8b, we discovered that the median CEO total compensation of that group was UK£2.6m. This suggests that Dechra Pharmaceuticals remunerates its CEO largely in line with the industry average. What's more, Ian Page holds UK£17m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20212020Proportion (2021)
Salary UK£551k UK£517k 21%
Other UK£2.1m UK£1.1m 79%
Total CompensationUK£2.6m UK£1.6m100%

Talking in terms of the industry, salary represented approximately 59% of total compensation out of all the companies we analyzed, while other remuneration made up 41% of the pie. Dechra Pharmaceuticals pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

LSE:DPH CEO Compensation October 15th 2021

A Look at Dechra Pharmaceuticals PLC's Growth Numbers

Over the past three years, Dechra Pharmaceuticals PLC has seen its earnings per share (EPS) grow by 11% per year. It achieved revenue growth of 18% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 Dechra Pharmaceuticals PLC Been A Good Investment?

Boasting a total shareholder return of 131% over three years, Dechra Pharmaceuticals PLC has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

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 did our research and spotted 2 warning signs for Dechra Pharmaceuticals that investors should look into moving forward.

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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Find out whether Dechra Pharmaceuticals is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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