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In 1998 Jim Gibson was appointed CEO of Big Yellow Group Plc (LON:BYG). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Jim Gibson’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Big Yellow Group Plc has a market cap of UK£1.7b, and is paying total annual CEO compensation of UK£2.2m. (This number is for the twelve months until March 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at UK£302k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of UK£792m to UK£2.5b. The median total CEO compensation was UK£1.4m.
As you can see, Jim Gibson is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Big Yellow Group Plc is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Big Yellow Group has changed over time.
Is Big Yellow Group Plc Growing?
Over the last three years Big Yellow Group Plc has grown its earnings per share (EPS) by an average of 5.0% per year (using a line of best fit). Its revenue is up 7.5% over last year.
I’d prefer higher revenue growth, but it is good to see modest EPS growth. Considering these factors I’d say performance has been pretty decent, though not amazing. Shareholders might be interested in this free visualization of analyst forecasts.
Has Big Yellow Group Plc Been A Good Investment?
Big Yellow Group Plc has generated a total shareholder return of 31% 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.
We compared the total CEO remuneration paid by Big Yellow Group Plc, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
One might like to have seen stronger growth, and the shareholder returns have failed to inspire, over the last three years. Considering this, we wouldn’t want to see any big pay rises, although we’d stop short of calling the CEO compensation unfair. Shareholders may want to check for free if Big Yellow Group insiders are buying or selling shares.
If you want to buy a stock that is better than Big Yellow Group, this free list of high return, low debt companies is a great place to look.
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 email@example.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.