Is Kingspan Group plc's (ISE:KRX) CEO Being Overpaid?
In 2005 Gene Murtagh was appointed CEO of Kingspan Group plc (ISE:KRX). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for Kingspan Group
How Does Gene Murtagh's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Kingspan Group plc has a market cap of €10b, and reported total annual CEO compensation of €2.0m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €828k. We looked at a group of companies with market capitalizations over €7.2b and the median CEO total compensation was €2.4m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
That means Gene Murtagh receives fairly typical remuneration for the CEO of a large company. 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 Kingspan Group has changed from year to year.
Is Kingspan Group plc Growing?
Kingspan Group plc has increased its earnings per share (EPS) by an average of 13% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 17%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Kingspan Group plc Been A Good Investment?
Most shareholders would probably be pleased with Kingspan Group plc for providing a total return of 109% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
Gene Murtagh is paid around the same as most CEOs of large companies.
The company is growing earnings per share and total shareholder returns have been pleasing. Indeed, many might consider the pay rather modest, given the solid company performance! Whatever your view on compensation, you might want to check if insiders are buying or selling Kingspan Group shares (free trial).
Important note: Kingspan Group may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
