It Looks Like Elders Limited's (ASX:ELD) CEO May Expect Their Salary To Be Put Under The Microscope

Key Insights

• Elders will host its Annual General Meeting on 19th of December
• Salary of AU$1.47m is part of CEO Mark Allison's total remuneration
• The total compensation is 38% higher than the average for the industry
• Elders' three-year loss to shareholders was 25% while its EPS was down 33% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at Elders Limited (ASX:ELD) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 19th of December. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Elders

How Does Total Compensation For Mark Allison Compare With Other Companies In The Industry?

At the time of writing, our data shows that Elders Limited has a market capitalization of AU$1.2b, and reported total annual CEO compensation of AU$3.6m for the year to September 2024. That's a notable increase of 56% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$1.5m.

On comparing similar companies from the Australian Food industry with market caps ranging from AU$628m to AU$2.5b, we found that the median CEO total compensation was AU$2.6m. Hence, we can conclude that Mark Allison is remunerated higher than the industry median. Furthermore, Mark Allison directly owns AU$9.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	AU$1.5m	AU$1.2m	41%
Other	AU$2.1m	AU$1.1m	59%
Total Compensation	AU$3.6m	AU$2.3m	100%

On an industry level, around 63% of total compensation represents salary and 37% is other remuneration. In Elders' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Elders Limited's Growth Numbers

Elders Limited has reduced its earnings per share by 33% a year over the last three years. Its revenue is down 5.7% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Elders Limited Been A Good Investment?

Since shareholders would have lost about 25% over three years, some Elders Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

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. That's why we did our research, and identified 4 warning signs for Elders (of which 2 are concerning!) that you should know about in order to have a holistic understanding of the stock.

Important note: Elders 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. 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.