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In 2003 Darren Throop was appointed CEO of Entertainment One Ltd. (LON:ETO). First, this article will compare CEO compensation with compensation at similar sized 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.
See our latest analysis for Entertainment One
How Does Darren Throop's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Entertainment One Ltd. has a market cap of UK£2.1b, and is paying total annual CEO compensation of UK£1.9m. (This number is for the twelve months until March 2018). We think total compensation is more important but we note that the CEO salary is lower, at UK£866k. We looked at a group of companies with market capitalizations from UK£1.6b to UK£5.1b, and the median CEO total compensation was UK£1.9m.
So Darren Throop is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see a visual representation of the CEO compensation at Entertainment One, below.
Is Entertainment One Ltd. Growing?
Over the last three years Entertainment One Ltd. has shrunk its earnings per share by an average of 3.1% per year (measured with a line of best fit). It saw its revenue drop -9.9% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. 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. It could be important to check this free visual depiction of what analysts expect for the future.
Has Entertainment One Ltd. Been A Good Investment?
I think that the total shareholder return of 121%, over three years, would leave most Entertainment One Ltd. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
Remuneration for Darren Throop is close enough to the median pay for a CEO of a similar sized company .
We're not seeing great strides in earnings per share, but the company has clearly pleased some investors, given the returns over the last three years. So we can't see a reason to suggest the pay is inappropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling Entertainment One shares (free trial).