Here's What We Learned About The CEO Pay At Stagecoach Group plc (LON:SGC)

Martin Griffiths has been the CEO of Stagecoach Group plc (LON:SGC) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Stagecoach Group.

See our latest analysis for Stagecoach Group

Comparing Stagecoach Group plc's CEO Compensation With the industry

Our data indicates that Stagecoach Group plc has a market capitalization of UK£405m, and total annual CEO compensation was reported as UK£949k for the year to May 2020. We note that's a decrease of 47% compared to last year. We note that the salary portion, which stands at UK£625.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations ranging from UK£150m to UK£600m, the reported median CEO total compensation was UK£715k. Hence, we can conclude that Martin Griffiths is remunerated higher than the industry median. What's more, Martin Griffiths holds UK£510k worth of shares in the company in their own name.

Talking in terms of the industry, salary represented approximately 66% of total compensation out of all the companies we analyzed, while other remuneration made up 34% of the pie. Stagecoach Group is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Stagecoach Group plc's Growth

Over the last three years, Stagecoach Group plc has shrunk its earnings per share by 8.3% per year. Its revenue is down 35% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Stagecoach Group plc Been A Good Investment?

Given the total shareholder loss of 49% over three years, many shareholders in Stagecoach Group plc are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As previously discussed, Martin is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Stagecoach Group that investors should look into moving forward.

Switching gears from Stagecoach Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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