Does Aggreko Plc's (LON:AGK) CEO Salary Reflect Performance?

Chris Weston became the CEO of Aggreko Plc (LON:AGK) in 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

Check out 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£2.0b, and total annual CEO compensation was reported as UK£1.7m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at UK£750k. We examined companies with market caps from UK£1.5b to UK£4.9b, and discovered that the median CEO total compensation of that group was UK£1.7m.

That means Chris Weston receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

You can see a visual representation of the CEO compensation at Aggreko, below.

Is Aggreko Plc Growing?

On average over the last three years, Aggreko Plc has shrunk earnings per share by 2.1% each year (measured with a line of best fit). Its revenue is down 5.9% over last year.

The lack of earnings per share growth in the last three years is unimpressive. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.

Has Aggreko Plc Been A Good Investment?

With a three year total loss of 16%, Aggreko Plc would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Chris Weston is paid around the same as most CEOs of similar size companies.

Returns have been disappointing and the company is not growing its earnings per share. Few would argue that it's wise for the company to pay any more, before returns improve. Shareholders may want to check for free if Aggreko insiders are buying or selling shares.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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