This article will reflect on the compensation paid to Duncan Painter who has served as CEO of Ascential plc (LON:ASCL) since 2011. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing Ascential plc's CEO Compensation With the industry
According to our data, Ascential plc has a market capitalization of UK£1.2b, and paid its CEO total annual compensation worth UK£1.7m over the year to December 2019. That's a notable decrease of 22% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£548k.
For comparison, other companies in the same industry with market capitalizations ranging between UK£774m and UK£2.5b had a median total CEO compensation of UK£2.3m. So it looks like Ascential compensates Duncan Painter in line with the median for the industry. What's more, Duncan Painter holds UK£11m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, roughly 38% of total compensation represents salary and 62% is other remuneration. It's interesting to note that Ascential allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Ascential plc's Growth
Over the last three years, Ascential plc has shrunk its earnings per share by 79% per year. It saw its revenue drop 18% over the last year.
Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Ascential plc Been A Good Investment?
Given the total shareholder loss of 12% over three years, many shareholders in Ascential plc are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As we touched on above, Ascential plc is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Ascential that investors should think about before committing capital to this stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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