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Andy Smith has been the CEO of Smiths Group plc ( LON:SMIN ) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Andy Smith’s Compensation Compare With Similar Sized Companies?
According to our data, Smiths Group plc has a market capitalization of UK£5.9b, and pays its CEO total annual compensation worth UK£3.3m. (This figure is for the year to 2018). While we always look at total compensation first, we note that the salary component is less, at UK£800k. We examined companies with market caps from UK£3.1b to UK£9.3b, and discovered that the median CEO compensation of that group was UK£2.5m.
Thus we can conclude that Andy Smith receives more in total compensation than the median of a group of companies in the same market, and of similar size to Smiths Group plc. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Smiths Group, below.
Is Smiths Group plc Growing?
Over the last three years Smiths Group plc has grown its earnings per share (EPS) by an average of 16% per year (using a line of best fit). Its revenue is down -2.0% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business. You might want to check this free visual report on analyst forecasts for future earnings .
Has Smiths Group plc Been A Good Investment?
I think that the total shareholder return of 83%, over three years, would leave most Smiths Group 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.
We compared total CEO remuneration at Smiths Group plc with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
However we must not forget that the EPS growth has been very strong over three years. On top of that, in the same period, returns to shareholders have been great. So, considering this good performance, the CEO compensation may be quite appropriate. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Smiths Group.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org .