Jonathan Murphy became the CEO of Assura Plc (LON:AGR) in 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Jonathan Murphy’s Compensation Compare With Similar Sized Companies?
Our data indicates that Assura Plc is worth UK£1.4b, and total annual CEO compensation is UK£1.5m. (This is based on the year to March 2018). While we always look at total compensation first, we note that the salary component is less, at UK£335k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of UK£767m to UK£2.5b. The median total CEO compensation was UK£1.3m.
That means Jonathan Murphy receives fairly typical remuneration for the CEO of a company that size. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see a visual representation of the CEO compensation at Assura, below.
Is Assura Plc Growing?
Over the last three years, Assura Plc has not seen its earnings per share change much, though they have deteriorated slightly, according to a line of best fit. It achieved revenue growth of 21% over the last year.
Unfortunately there is a complete lack of earnings per share improvement, over three years. There’s no doubt that the silver lining is that revenue is up. But it isn’t sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Assura Plc Been A Good Investment?
With a total shareholder return of 20% over three years, Assura Plc shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
Jonathan Murphy is paid around the same as most CEOs of similar size companies.
The company isn’t growing earnings per share, and nor have the total returns inspired us. We do not think the CEO pay is a problem, but we’d venture the company should look to improve its business metrics (and share price) before paying any more. So you may want to check if insiders are buying Assura shares with their own money (free access).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.