It's Unlikely That The CEO Of BNK Banking Corporation Limited (ASX:BBC) Will See A Huge Pay Rise This Year

Key Insights

• BNK Banking to hold its Annual General Meeting on 29th of November
• CEO Allan Savins' total compensation includes salary of AU$529.7k
• Total compensation is similar to the industry average
• Over the past three years, BNK Banking's EPS fell by 78% and over the past three years, the total loss to shareholders 17%

Shareholders of BNK Banking Corporation Limited (ASX:BBC) will have been dismayed by the negative share price return over the last three years. Per share earnings growth is also lacking, despite revenue growth. Shareholders will have a chance to take their concerns to the board at the next AGM on 29th of November and vote on resolutions including executive compensation, which studies show may have an impact on company performance. Here's why we think shareholders should hold off on a raise for the CEO at the moment.

Check out our latest analysis for BNK Banking

Comparing BNK Banking Corporation Limited's CEO Compensation With The Industry

According to our data, BNK Banking Corporation Limited has a market capitalization of AU$39m, and paid its CEO total annual compensation worth AU$719k over the year to June 2023. This means that the compensation hasn't changed much from last year. Notably, the salary which is AU$529.7k, represents most of the total compensation being paid.

In comparison with other companies in the Australian Banks industry with market capitalizations under AU$305m, the reported median total CEO compensation was AU$929k. This suggests that BNK Banking remunerates its CEO largely in line with the industry average. Furthermore, Allan Savins directly owns AU$509k worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	AU$530k	AU$380k	74%
Other	AU$189k	AU$341k	26%
Total Compensation	AU$719k	AU$722k	100%

Speaking on an industry level, nearly 63% of total compensation represents salary, while the remainder of 37% is other remuneration. It's interesting to note that BNK Banking pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at BNK Banking Corporation Limited's Growth Numbers

Over the last three years, BNK Banking Corporation Limited has shrunk its earnings per share by 78% per year. In the last year, its revenue is up 69%.

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. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has BNK Banking Corporation Limited Been A Good Investment?

With a three year total loss of 17% for the shareholders, BNK Banking Corporation Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. In the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan is in line with their expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 2 warning signs for BNK Banking you should be aware of, and 1 of them is a bit unpleasant.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.