This Is Why Shareholders Will Hold Back On A Pay Rise For Bendigo and Adelaide Bank Limited's (ASX:BEN) CEO This Year

Performance at Bendigo and Adelaide Bank Limited (ASX:BEN) has been reasonably good and CEO Marnie Baker has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 09 November 2021. We present our case of why we think CEO compensation looks fair.

Check out our latest analysis for Bendigo and Adelaide Bank

Comparing Bendigo and Adelaide Bank Limited's CEO Compensation With the industry

According to our data, Bendigo and Adelaide Bank Limited has a market capitalization of AU$5.2b, and paid its CEO total annual compensation worth AU$1.9m over the year to June 2021. That's a notable decrease of 11% on last year. We note that the salary portion, which stands at AU$1.17m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between AU$2.7b and AU$8.5b had a median total CEO compensation of AU$2.1m. This suggests that Bendigo and Adelaide Bank remunerates its CEO largely in line with the industry average. What's more, Marnie Baker holds AU$8.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	AU$1.2m	AU$1.2m	61%
Other	AU$752k	AU$957k	39%
Total Compensation	AU$1.9m	AU$2.2m	100%

On an industry level, roughly 64% of total compensation represents salary and 36% is other remuneration. Although there is a difference in how total compensation is set, Bendigo and Adelaide Bank more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Bendigo and Adelaide Bank Limited's Growth

Over the last three years, Bendigo and Adelaide Bank Limited has shrunk its earnings per share by 9.6% per year. In the last year, its revenue is up 15%.

Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Bendigo and Adelaide Bank Limited Been A Good Investment?

Bendigo and Adelaide Bank Limited has not done too badly by shareholders, with a total return of 2.5%, over three years. It would be nice to see that metric improve in the future. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

To Conclude...

The overall company performance has been commendable, however there are still areas for improvement. Despite robust revenue growth, until EPS growth improves, shareholders may be hesitant to increase CEO pay by too much.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 2 which make us uncomfortable) in Bendigo and Adelaide Bank we think you should know about.

Important note: Bendigo and Adelaide Bank is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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.

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