Paul Scott became the CEO of Renew Holdings plc (LON:RNWH) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Renew Holdings.

Check out our latest analysis for Renew Holdings

Comparing Renew Holdings plc's CEO Compensation With the industry

At the time of writing, our data shows that Renew Holdings plc has a market capitalization of UK£441m, and reported total annual CEO compensation of UK£833k for the year to September 2020. That's a fairly small increase of 4.5% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£292k.

On examining similar-sized companies in the industry with market capitalizations between UK£293m and UK£1.2b, we discovered that the median CEO total compensation of that group was UK£833k. This suggests that Renew Holdings remunerates its CEO largely in line with the industry average. Furthermore, Paul Scott directly owns UK£419k worth of shares in the company.

On an industry level, roughly 63% of total compensation represents salary and 37% is other remuneration. In Renew Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Renew Holdings plc's Growth

Renew Holdings plc has seen its earnings per share (EPS) increase by 11% a year over the past three years. It achieved revenue growth of 3.4% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Renew Holdings plc Been A Good Investment?

We think that the total shareholder return of 33%, over three years, would leave most Renew Holdings plc shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

As we noted earlier, Renew Holdings pays its CEO in line with similar-sized companies belonging to the same industry. Investors would surely be happy to see that returns have been great, and that EPS is up. So one could argue that CEO compensation is quite modest, if you consider company performance! Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Renew Holdings that you should be aware of before investing.

Switching gears from Renew Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.