We Think Some Shareholders May Hesitate To Increase Inghams Group Limited's (ASX:ING) CEO Compensation

Key Insights

• Inghams Group's Annual General Meeting to take place on 6th of November
• CEO Andrew Reeves' total compensation includes salary of AU$1.16m
• The overall pay is 68% above the industry average
• Inghams Group's EPS grew by 15% over the past three years while total shareholder return over the past three years was 43%

Performance at Inghams Group Limited (ASX:ING) has been reasonably good and CEO Andrew Reeves has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 6th of November, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Inghams Group

Comparing Inghams Group Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Inghams Group Limited has a market capitalization of AU$1.4b, and reported total annual CEO compensation of AU$2.6m for the year to June 2023. We note that's an increase of 70% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$1.2m.

In comparison with other companies in the Australian Food industry with market capitalizations ranging from AU$629m to AU$2.5b, the reported median CEO total compensation was AU$1.5m. Hence, we can conclude that Andrew Reeves is remunerated higher than the industry median. Furthermore, Andrew Reeves directly owns AU$164k worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	AU$1.2m	AU$1.1m	44%
Other	AU$1.5m	AU$455k	56%
Total Compensation	AU$2.6m	AU$1.5m	100%

Speaking on an industry level, nearly 71% of total compensation represents salary, while the remainder of 29% is other remuneration. Inghams Group pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Inghams Group Limited's Growth

Inghams Group Limited's earnings per share (EPS) grew 15% per year over the last three years. In the last year, its revenue is up 12%.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Inghams Group Limited Been A Good Investment?

Boasting a total shareholder return of 43% over three years, Inghams Group Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay 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 pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which shouldn't be ignored) in Inghams Group we think you should know about.

Switching gears from Inghams Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.