In 2011 Steve Mogford was appointed CEO of United Utilities Group PLC (LON:UU.). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for United Utilities Group
How Does Steve Mogford's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that United Utilities Group PLC has a market cap of UK£5.3b, and is paying total annual CEO compensation of UK£2.3m. (This is based on the year to March 2019). That's a fairly small increase of 4.7% on year before. While we always look at total compensation first, we note that the salary component is less, at UK£754k. We looked at a group of companies with market capitalizations from UK£3.3b to UK£9.9b, and the median CEO total compensation was UK£2.7m.
So Steve Mogford receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at United Utilities Group has changed from year to year.
Is United Utilities Group PLC Growing?
United Utilities Group PLC has reduced its earnings per share by an average of 5.9% a year, over the last three years (measured with a line of best fit). Its revenue is up 4.8% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.
Has United Utilities Group PLC Been A Good Investment?
Since shareholders would have lost about 8.5% over three years, some United Utilities Group PLC shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
Steve Mogford 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. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling United Utilities Group (free visualization of insider trades).
If you want to buy a stock that is better than United Utilities Group, this free list of high return, low debt companies is a great place to look.
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