Increases to CEO Compensation Might Be Put On Hold For Now at Australia and New Zealand Banking Group Limited (ASX:ANZ)

Performance at Australia and New Zealand Banking Group Limited (ASX:ANZ) has been reasonably good and CEO Shayne Elliott has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 16 December 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Australia and New Zealand Banking Group

How Does Total Compensation For Shayne Elliott Compare With Other Companies In The Industry?

Our data indicates that Australia and New Zealand Banking Group Limited has a market capitalization of AU$78b, and total annual CEO compensation was reported as AU$5.5m for the year to September 2021. That's a fairly small increase of 4.7% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$2.5m.

On comparing similar companies in the industry with market capitalizations above AU$11b, we found that the median total CEO compensation was AU$3.2m. This suggests that Shayne Elliott is paid more than the median for the industry. Furthermore, Shayne Elliott directly owns AU$8.0m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
Salary	AU$2.5m	AU$2.5m	45%
Other	AU$3.0m	AU$2.7m	55%
Total Compensation	AU$5.5m	AU$5.2m	100%

Talking in terms of the industry, salary represented approximately 57% of total compensation out of all the companies we analyzed, while other remuneration made up 43% of the pie. In Australia and New Zealand Banking Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Australia and New Zealand Banking Group Limited's Growth Numbers

Over the last three years, Australia and New Zealand Banking Group Limited has shrunk its earnings per share by 3.9% per year. In the last year, its revenue is up 21%.

The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Australia and New Zealand Banking Group Limited Been A Good Investment?

Australia and New Zealand Banking Group Limited has generated a total shareholder return of 28% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

Some shareholders will be pleased by the relatively good results, however, the results could still be improved. We still think that some shareholders will be hesitant of increasing CEO pay until EPS growth improves, since they are already paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Australia and New Zealand Banking Group that you should be aware of before investing.

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.

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

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.