Here's Why It's Unlikely That Jersey Electricity plc's (LON:JEL) CEO Will See A Pay Rise This Year

Key Insights

• Jersey Electricity will host its Annual General Meeting on 5th of March
• CEO Chris Ambler's total compensation includes salary of UK£298.5k
• Total compensation is 307% above industry average
• Jersey Electricity's three-year loss to shareholders was 3.1% while its EPS was down 1.0% over the past three years

Jersey Electricity plc (LON:JEL) has not performed well recently and CEO Chris Ambler will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 5th of March. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Jersey Electricity

How Does Total Compensation For Chris Ambler Compare With Other Companies In The Industry?

Our data indicates that Jersey Electricity plc has a market capitalization of UK£138m, and total annual CEO compensation was reported as UK£464k for the year to September 2023. That's a notable increase of 9.2% on last year. In particular, the salary of UK£298.5k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the the United Kingdom Electric Utilities industry with market capitalizations ranging between UK£79m and UK£315m had a median total CEO compensation of UK£114k. Hence, we can conclude that Chris Ambler is remunerated higher than the industry median.

Component	2023	2022	Proportion (2023)
Salary	UK£299k	UK£264k	64%
Other	UK£166k	UK£161k	36%
Total Compensation	UK£464k	UK£425k	100%

On an industry level, around 64% of total compensation represents salary and 36% is other remuneration. Our data reveals that Jersey Electricity allocates salary more or less in line with the wider market. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Jersey Electricity plc's Growth Numbers

Earnings per share at Jersey Electricity plc are much the same as they were three years ago, albeit slightly lower. It achieved revenue growth of 6.5% over the last year.

Its a bit disappointing to see that the company has failed to grow its EPS. The fairly low revenue growth fails to impress given that the EPS is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Jersey Electricity plc Been A Good Investment?

Since shareholders would have lost about 3.1% over three years, some Jersey Electricity plc investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which is concerning) in Jersey Electricity we think you should know about.

Important note: Jersey Electricity 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. 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.