Our View On Arrow Global Group's (LON:ARW) CEO Pay

Lee Rochford has been the CEO of Arrow Global Group PLC (LON:ARW) since 2017, 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.

Check out our latest analysis for Arrow Global Group

Comparing Arrow Global Group PLC's CEO Compensation With the industry

According to our data, Arrow Global Group PLC has a market capitalization of UK£144m, and paid its CEO total annual compensation worth UK£932k over the year to December 2019. That's a slightly lower by 7.8% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at UK£449k.

For comparison, other companies in the same industry with market capitalizations ranging between UK£76m and UK£305m had a median total CEO compensation of UK£682k. Hence, we can conclude that Lee Rochford is remunerated higher than the industry median. What's more, Lee Rochford holds UK£401k worth of shares in the company in their own name.

On an industry level, total compensation is equally proportioned between salary and other compensation, that is, they each represent approximately 50% of the total compensation. Although there is a difference in how total compensation is set, Arrow Global Group more or less reflects the market in terms of setting the salary. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Arrow Global Group PLC's Growth

Arrow Global Group PLC has seen its earnings per share (EPS) increase by 7.8% a year over the past three years. Its revenue is down 14% over the previous year.

We would prefer it if there was revenue growth, but the modest EPSgrowth gives us some relief. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Arrow Global Group PLC Been A Good Investment?

Given the total shareholder loss of 80% over three years, many shareholders in Arrow Global Group PLC are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we noted earlier, Arrow Global Group pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Over the last three years, shareholder returns have been downright disappointing for Arrow Global Group, and although EPS growth is steady, it hasn't set the world on fire. This doesn't look good when you see that Lee is earning more than the industry median. With such poor returns, we would understand if shareholders had concerns related to the CEO's pay.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for Arrow Global Group you should be aware of, and 1 of them is concerning.

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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