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Severn Trent Plc (LON:SVT) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 08 July 2021. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.
See our latest analysis for Severn Trent
How Does Total Compensation For Liv Garfield Compare With Other Companies In The Industry?
According to our data, Severn Trent Plc has a market capitalization of UK£6.4b, and paid its CEO total annual compensation worth UK£2.8m over the year to March 2021. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£738k.
In comparison with other companies in the industry with market capitalizations ranging from UK£2.9b to UK£8.7b, the reported median CEO total compensation was UK£2.8m. This suggests that Severn Trent remunerates its CEO largely in line with the industry average. Moreover, Liv Garfield also holds UK£6.1m worth of Severn Trent stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2021 | 2020 | Proportion (2021) |
| Salary | UK£738k | UK£721k | 26% |
| Other | UK£2.1m | UK£2.0m | 74% |
| Total Compensation | UK£2.8m | UK£2.8m | 100% |
On an industry level, roughly 54% of total compensation represents salary and 46% is other remuneration. Severn Trent pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Severn Trent Plc's Growth Numbers
Over the last three years, Severn Trent Plc has shrunk its earnings per share by 4.3% per year. In the last year, its revenue is down 1.3%.
The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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.