Most Shareholders Will Probably Find That The CEO Compensation For Halma plc (LON:HLMA) Is Reasonable

Under the guidance of CEO Andrew Williams, Halma plc (LON:HLMA) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 22 July 2021. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

Check out our latest analysis for Halma

How Does Total Compensation For Andrew Williams Compare With Other Companies In The Industry?

According to our data, Halma plc has a market capitalization of UK£11b, and paid its CEO total annual compensation worth UK£3.0m over the year to March 2021. That's a notable decrease of 23% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£636k.

For comparison, other companies in the industry with market capitalizations above UK£5.8b, reported a median total CEO compensation of UK£3.8m. This suggests that Halma remunerates its CEO largely in line with the industry average. Furthermore, Andrew Williams directly owns UK£20m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
Salary	UK£636k	UK£669k	21%
Other	UK£2.4m	UK£3.2m	79%
Total Compensation	UK£3.0m	UK£3.9m	100%

On an industry level, around 63% of total compensation represents salary and 37% is other remuneration. It's interesting to note that Halma allocates a smaller portion of compensation to salary in comparison 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.

Halma plc's Growth

Over the past three years, Halma plc has seen its earnings per share (EPS) grow by 9.7% per year. It saw its revenue drop 1.5% over the last year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest improvement in EPS is good. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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?

We think that the total shareholder return of 105%, over three years, would leave most Halma plc shareholders smiling. 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.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

Shareholders may want to check for free if Halma insiders are buying or selling shares.

Important note: Halma is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.
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