Key Things To Understand About Halma's (LON:HLMA) CEO Pay Cheque

Andrew Williams became the CEO of Halma plc (LON:HLMA) in 2005, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Halma.

View our latest analysis for Halma

Comparing Halma plc's CEO Compensation With the industry

At the time of writing, our data shows that Halma plc has a market capitalization of UK£8.6b, and reported total annual CEO compensation of UK£3.8m for the year to March 2020. We note that's a small decrease of 4.2% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at UK£669k.

For comparison, other companies in the industry with market capitalizations above UK£5.9b, reported a median total CEO compensation of UK£3.8m. So it looks like Halma compensates Andrew Williams in line with the median for the industry. Furthermore, Andrew Williams directly owns UK£16m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 70% of total compensation represents salary and 30% is other remuneration. In Halma's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Halma plc's Growth

Halma plc's earnings per share (EPS) grew 8.3% per year over the last three years. It achieved revenue growth of 1.9% over the last year.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but we're happy with the modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Halma plc Been A Good Investment?

Boasting a total shareholder return of 85% over three years, Halma plc has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

As we touched on above, Halma plc is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But the business isn't reporting great numbers in terms of EPS growth. On the other hand, shareholder returns over the same period have been very healthy. There is room for improved company performance, but we don't see the CEO compensation as a big issue here.

So you may want to check if insiders are buying Halma 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.

When trading Halma or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.