Yahoo Finance Is Aggreko Plc’s (LON:AGK) CEO Pay Fair?
Chris Weston has been the CEO of Aggreko Plc (LON:AGK) since 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for Aggreko
How Does Chris Weston’s Compensation Compare With Similar Sized Companies?
Our data indicates that Aggreko Plc is worth UK£1.8b, and total annual CEO compensation is UK£2.3m. (This figure is for the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at UK£750k. When we examined a selection of companies with market caps ranging from UK£789m to UK£2.5b, we found the median CEO compensation was UK£1.6m.
As you can see, Chris Weston is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Aggreko Plc is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Aggreko has changed over time.
Is Aggreko Plc Growing?
Aggreko Plc has reduced its earnings per share by an average of 19% a year, over the last three years. In the last year, its revenue is up 12%.
Few shareholders would be pleased to read that earnings per share are lower over three years. There’s no doubt that the silver lining is that revenue is up. But it isn’t sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
You might want to check this free visual report on analyst forecasts for future earnings.
Has Aggreko Plc Been A Good Investment?
Given the total loss of 18% over three years, many shareholders in Aggreko Plc are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
In Summary…
We examined the amount Aggreko Plc pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
Arguably worse, investors are without a positive return for the last three years. This analysis suggests to us that the CEO is paid too generously! So you may want to check if insiders are buying Aggreko shares with their own money (free access).
Or you might prefer examine intently this intuitive graph showing past earnings and revenue.
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 editorial-team@simplywallst.com.
