Commonwealth Bank of Australia's (ASX:CBA) CEO Compensation Is Looking A Bit Stretched At The Moment

CEO Matt Comyn has done a decent job of delivering relatively good performance at Commonwealth Bank of Australia (ASX:CBA) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 12 October 2021. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Commonwealth Bank of Australia

Comparing Commonwealth Bank of Australia's CEO Compensation With the industry

At the time of writing, our data shows that Commonwealth Bank of Australia has a market capitalization of AU$176b, and reported total annual CEO compensation of AU$6.3m for the year to June 2021. That's a fairly small increase of 3.6% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$2.3m.

For comparison, other companies in the industry with market capitalizations above AU$11b, reported a median total CEO compensation of AU$3.2m. Accordingly, our analysis reveals that Commonwealth Bank of Australia pays Matt Comyn north of the industry median. What's more, Matt Comyn holds AU$11m 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$2.3m	AU$2.2m	36%
Other	AU$4.0m	AU$3.9m	64%
Total Compensation	AU$6.3m	AU$6.1m	100%

On an industry level, around 68% of total compensation represents salary and 32% is other remuneration. Commonwealth Bank of Australia sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Commonwealth Bank of Australia's Growth

Over the past three years, Commonwealth Bank of Australia has seen its earnings per share (EPS) grow by 1.2% per year. In the last year, its revenue is up 11%.

We think the revenue growth is good. And the improvement in EPSis modest but respectable. So while performance isn't amazing, we think it really does seem quite respectable. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Commonwealth Bank of Australia Been A Good Investment?

We think that the total shareholder return of 76%, over three years, would leave most Commonwealth Bank of Australia shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being 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 1 warning sign for Commonwealth Bank of Australia that you should be aware of before investing.

Important note: Commonwealth Bank of Australia 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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