Shareholders May Be Wary Of Increasing Spectris plc's (LON:SXS) CEO Compensation Package
Key Insights
- Spectris' Annual General Meeting to take place on 22nd of May
- Total pay for CEO Andrew Heath includes UK£767.0k salary
- The total compensation is 65% higher than the average for the industry
- Over the past three years, Spectris' EPS fell by 7.3% and over the past three years, the total loss to shareholders 23%
Spectris plc (LON:SXS) has not performed well recently and CEO Andrew Heath will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 22nd of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.
View our latest analysis for Spectris
How Does Total Compensation For Andrew Heath Compare With Other Companies In The Industry?
Our data indicates that Spectris plc has a market capitalization of UK£2.1b, and total annual CEO compensation was reported as UK£2.1m for the year to December 2024. Notably, that's a decrease of 37% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at UK£767k.
For comparison, other companies in the British Electronic industry with market capitalizations ranging between UK£1.5b and UK£4.8b had a median total CEO compensation of UK£1.3m. This suggests that Andrew Heath is paid more than the median for the industry. What's more, Andrew Heath holds UK£2.3m worth of shares in the company in their own name.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | UK£767k | UK£734k | 37% |
| Other | UK£1.3m | UK£2.6m | 63% |
| Total Compensation | UK£2.1m | UK£3.3m | 100% |
On an industry level, around 88% of total compensation represents salary and 12% is other remuneration. In Spectris' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Spectris plc's Growth Numbers
Over the last three years, Spectris plc has shrunk its earnings per share by 7.3% per year. It saw its revenue drop 10% over the last year.
Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Spectris plc Been A Good Investment?
Since shareholders would have lost about 23% over three years, some Spectris plc investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Spectris you should be aware of, and 1 of them is a bit concerning.
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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.