Here's Why We Think Luxfer Holdings PLC's (NYSE:LXFR) CEO Compensation Looks Fair for the time being

Under the guidance of CEO Alok Maskara, Luxfer Holdings PLC (NYSE:LXFR) 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 09 June 2021. Here is our take on why we think the CEO compensation looks appropriate.

Check out our latest analysis for Luxfer Holdings

How Does Total Compensation For Alok Maskara Compare With Other Companies In The Industry?

At the time of writing, our data shows that Luxfer Holdings PLC has a market capitalization of US$644m, and reported total annual CEO compensation of US$2.0m for the year to December 2020. That's a notable decrease of 8.8% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$657k.

For comparison, other companies in the same industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$2.8m. So it looks like Luxfer Holdings compensates Alok Maskara in line with the median for the industry. What's more, Alok Maskara holds US$5.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	US$657k	US$675k	32%
Other	US$1.4m	US$1.6m	68%
Total Compensation	US$2.0m	US$2.2m	100%

On an industry level, around 19% of total compensation represents salary and 81% is other remuneration. It's interesting to note that Luxfer Holdings pays out a greater portion of remuneration through salary, compared to the industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Luxfer Holdings PLC's Growth

Luxfer Holdings PLC has seen its earnings per share (EPS) increase by 2.3% a year over the past three years. In the last year, its revenue is down 5.9%.

We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Luxfer Holdings PLC Been A Good Investment?

We think that the total shareholder return of 36%, over three years, would leave most Luxfer Holdings PLC shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

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. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 4 warning signs for Luxfer Holdings that investors should be aware of in a dynamic business environment.

Important note: Luxfer Holdings 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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