What We Learned About Bendigo and Adelaide Bank's (ASX:BEN) CEO Pay

Marnie Baker became the CEO of Bendigo and Adelaide Bank Limited (ASX:BEN) in 2018, 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 Bendigo and Adelaide Bank.

See our latest analysis for Bendigo and Adelaide Bank

How Does Total Compensation For Marnie Baker Compare With Other Companies In The Industry?

At the time of writing, our data shows that Bendigo and Adelaide Bank Limited has a market capitalization of AU$5.1b, and reported total annual CEO compensation of AU$2.2m for the year to June 2020. That's a slightly lower by 4.9% over the previous year. Notably, the salary which is AU$1.21m, represents most of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from AU$2.6b to AU$8.3b, we found that the median CEO total compensation was AU$2.0m. So it looks like Bendigo and Adelaide Bank compensates Marnie Baker in line with the median for the industry. What's more, Marnie Baker holds AU$9.9m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 65% of total compensation represents salary and 35% is other remuneration. In Bendigo and Adelaide Bank's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader 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 Bendigo and Adelaide Bank Limited's Growth Numbers

Over the last three years, Bendigo and Adelaide Bank Limited has shrunk its earnings per share by 25% per year. In the last year, its revenue is down 7.2%.

Few shareholders would be pleased to read that EPS have declined. 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. 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?

Since shareholders would have lost about 2.2% over three years, some Bendigo and Adelaide Bank Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, Bendigo and Adelaide Bank pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 5 warning signs for Bendigo and Adelaide Bank you should be aware of, and 1 of them is a bit concerning.

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.

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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.
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