Breville Group Limited's (ASX:BRG) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Breville Group will host its Annual General Meeting on 7th of November
• Total pay for CEO Jim Clayton includes AU$1.67m salary
• Total compensation is 226% above industry average
• Over the past three years, Breville Group's EPS grew by 16% and over the past three years, the total loss to shareholders 16%

The underwhelming share price performance of Breville Group Limited (ASX:BRG) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 7th of November. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for Breville Group

Comparing Breville Group Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Breville Group Limited has a market capitalization of AU$3.1b, and reported total annual CEO compensation of AU$5.6m for the year to June 2023. That's slightly lower by 4.7% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$1.7m.

On examining similar-sized companies in the Australia Consumer Durables industry with market capitalizations between AU$1.6b and AU$5.0b, we discovered that the median CEO total compensation of that group was AU$1.7m. Hence, we can conclude that Jim Clayton is remunerated higher than the industry median. Furthermore, Jim Clayton directly owns AU$6.0m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	AU$1.7m	AU$1.7m	30%
Other	AU$3.9m	AU$4.2m	70%
Total Compensation	AU$5.6m	AU$5.8m	100%

On an industry level, roughly 75% of total compensation represents salary and 25% is other remuneration. It's interesting to note that Breville Group allocates a smaller portion of compensation to salary 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 Breville Group Limited's Growth Numbers

Breville Group Limited has seen its earnings per share (EPS) increase by 16% a year over the past three years. Its revenue is up 4.2% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Breville Group Limited Been A Good Investment?

Given the total shareholder loss of 16% over three years, many shareholders in Breville Group Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Breville Group that investors should look into moving forward.

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.

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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.