Steve Rowe has been the CEO of Marks and Spencer Group plc (LON:MKS) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Marks and Spencer Group
How Does Total Compensation For Steve Rowe Compare With Other Companies In The Industry?
Our data indicates that Marks and Spencer Group plc has a market capitalization of UK£1.8b, and total annual CEO compensation was reported as UK£1.2m for the year to March 2020. We note that's a decrease of 20% compared to last year. We note that the salary portion, which stands at UK£828.0k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations ranging from UK£772m to UK£2.5b, the reported median CEO total compensation was UK£1.2m. From this we gather that Steve Rowe is paid around the median for CEOs in the industry. Furthermore, Steve Rowe directly owns UK£516k worth of shares in the company.
Component | 2020 | 2019 | Proportion (2020) |
Salary | UK£828k | UK£810k | 68% |
Other | UK£383k | UK£707k | 32% |
Total Compensation | UK£1.2m | UK£1.5m | 100% |
On an industry level, roughly 65% of total compensation represents salary and 35% is other remuneration. Our data reveals that Marks and Spencer Group allocates salary more or less in line with the wider market. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
Marks and Spencer Group plc's Growth
Over the last three years, Marks and Spencer Group plc has shrunk its earnings per share by 44% per year. It saw its revenue drop 1.9% over the last year.
Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Marks and Spencer Group plc Been A Good Investment?
Given the total shareholder loss of 68% over three years, many shareholders in Marks and Spencer Group plc are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
As we touched on above, Marks and Spencer Group 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. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 4 warning signs for Marks and Spencer Group you should be aware of, and 1 of them is a bit unpleasant.
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.
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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