Yahoo Finance How Is Compass Group's (LON:CPG) CEO Compensated?
This article will reflect on the compensation paid to Dominic Blakemore who has served as CEO of Compass Group PLC (LON:CPG) since 2018. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Compass Group.
Check out our latest analysis for Compass Group
How Does Total Compensation For Dominic Blakemore Compare With Other Companies In The Industry?
According to our data, Compass Group PLC has a market capitalization of UK£21b, and paid its CEO total annual compensation worth UK£4.7m over the year to September 2019. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at UK£956k.
On comparing similar companies in the industry with market capitalizations above UK£6.1b, we found that the median total CEO compensation was UK£4.8m. So it looks like Compass Group compensates Dominic Blakemore in line with the median for the industry. What's more, Dominic Blakemore holds UK£2.9m worth of shares in the company in their own name.
Component | 2019 | 2018 | Proportion (2019) |
Salary | UK£956k | UK£863k | 21% |
Other | UK£3.7m | UK£3.7m | 79% |
Total Compensation | UK£4.7m | UK£4.6m | 100% |
Talking in terms of the industry, salary represented approximately 70% of total compensation out of all the companies we analyzed, while other remuneration made up 30% of the pie. It's interesting to note that Compass Group allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Compass Group PLC's Growth
Over the last three years, Compass Group PLC has shrunk its earnings per share by 2.5% per year. Its revenue is up 4.8% over the last year.
A lack of EPS improvement is not good to see. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Compass Group PLC Been A Good Investment?
Since shareholders would have lost about 25% over three years, some Compass Group PLC investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
As previously discussed, Dominic is compensated close to the median for companies of its size, and which belong to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future 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 Compass Group that investors should look into moving forward.
Important note: Compass Group 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.
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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