In 2012 Kris Hagerman was appointed CEO of Sophos Group plc (LON:SOPH). 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 – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Kris Hagerman’s Compensation Compare With Similar Sized Companies?
According to our data, Sophos Group plc has a market capitalization of UK£2.3b, and pays its CEO total annual compensation worth US$9m. That’s a notable increase of 275% on last year. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO compensation of that group was US$2m.
Thus we can conclude that Kris Hagerman receives more in total compensation than the median of a group of companies in the same market, and of similar size to Sophos Group plc. However, this doesn’t necessarily mean the pay is too high. 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 Sophos Group has changed over time.
Is Sophos Group plc Growing?
Sophos Group plc has increased its earnings per share (EPS) by an average of 16% a year, over the last three years In the last year, its revenue is up 21%.
This demonstrates that the company has been improving recently. A good result. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Sophos Group plc Been A Good Investment?
I think that the total shareholder return of 91%, over three years, would leave most Sophos Group plc shareholders smiling. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.
We compared total CEO remuneration at Sophos Group plc with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Sophos Group plc (free visualization of insider trades).
Or you might prefer examine intently this intuitive graph showing past earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.