We think the compensation for the CEO of Assura Plc (LON: AGR) looks right


Led by CEO Jonathan Murphy, Assura Plc (LON: AGR) has been doing pretty well lately. With shareholders attending the upcoming AGM on July 6, 2021, the focus will likely not be on CEO compensation, but rather on the steps management will take to continue the growth momentum. Here’s our take on why we believe the CEO’s compensation is reasonable.

Check out our latest analysis for Assura

Assura Plc CEO compensation compared to the industry

At the time of writing, our data shows Assura Plc has a market capitalization of £ 2.0bn with a total annual CEO compensation of £ 1.2m for the year ending March 2021. This is largely unchanged compared to the previous year’s remuneration. We think total compensation is more important, but our data shows CEO salary is lower at £ 416,000.

When comparing similar companies in the same industry with market capitalizations of £ 1.4 billion to £ 4.6 billion, we found that the average total CEO compensation was £ 1.1 million. From this we can see that Jonathan Murphy is paid roughly median for CEOs in the industry. In addition, Jonathan Murphy holds £ 1.9m worth of shares in the company on his own behalf, suggesting they have a lot of skin in the game.

component

2021

2020

Share (2021)

salary

€ 416,000

€ 395,000

35%

Other

£ 771k

£ 760k

65%

Total compensation

UK £ 1.2m

UK £ 1.2m

100%

At the industry level, around 42% of total compensation is based on salaries and 58% on other compensation. Assura provides a lower portion of the payroll compared to the industry as a whole. It is important to note that a propensity for non-salary compensation suggests that total compensation is tied to company performance.

CEO compensation

Assura Plc

Over the past three years, Assura Plc has grown its earnings per share (EPS) by 3.7% per year. Last year sales increased by 8.3%.

We’re not particularly impressed with the sales growth, but the slight improvement in EPS is good. It is clear that the performance was quite decent, but based on this information, it is not overwhelming. Historical performance can sometimes be a good indicator of what’s next, but if you want a glimpse into the future of the company, you might be interested these free Visualization of analyst forecasts.

Was Assura Plc a Good Investment?

With a total shareholder return of 50% over three years, Assura Plc has performed well with shareholders. So you couldn’t worry if the CEO got paid more than is common for companies of about the same size.

In summary …

The company’s decent performance could have made most shareholders happy, making the CEO fee possibly the least of the concerns discussed at the upcoming AGM. With that in mind, any proposed CEO compensation increase will continue to be judged on how appropriate it is based on performance and industry benchmarks.

CEO compensation is an important area to keep track of, but we also need to look out for other characteristics of the company. We have identified 3 warning signs for Assura (1 is Worrying!) Things to Consider Before Investing Here.

Naturally, You could find a fantastic investment by looking at a different range of stocks. So check this out free List of interesting companies.

This article from Simply Wall St is of a general nature. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. Our goal is to provide you with long-term, focused analysis based on fundamentals. Note that our analysis may not take into account the latest company announcements or quality material, which may be sensitive to the price. Simply Wall St has no position in the stocks mentioned.

Do you have any feedback on this article? Concerned about the content? Get in touch directly with us. Alternatively, send an email to the editorial team (at) simplywallst.com.


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