This method should give us information to assess how appropriately the company pays the CEO. We looked at a group of companies with market capitalizations from UK£3.2b to UK£9.6b, and the median CEO total compensation was UK£2.8m. So Andy Smith is paid around the average of the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Smiths Group has changed from year to year. Smiths Group plc has increased its earnings per share by an average of 1.1% a year, over the last three years . In the last year, its revenue is up 1.2%. I’m not particularly impressed by the revenue growth, but I’m happy with the modest EPS growth.
So there are some positives here, but not enough to earn high praise. You might want to check this free visual report on analyst forecasts for future earnings . I think that the total shareholder return of 40%, over three years, would leave most Smiths Group plc shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary… Andy Smith is paid around the same as most CEOs of similar size companies. The company isn’t showing particularly great growth, but shareholder returns have been pleasing. So all things considered I’d venture that the CEO pay is appropriate. So you may want to check if insiders are buying Smiths Group shares with their own money .
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