It's Probably Less Likely That TasFoods Limited's (ASX:TFL) CEO Will See A Huge Pay Rise This Year

In the past three years, shareholders of TasFoods Limited (ASX:TFL) have seen a loss on their investment. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 20 May 2021. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for TasFoods

Comparing TasFoods Limited's CEO Compensation With the industry

At the time of writing, our data shows that TasFoods Limited has a market capitalization of AU$49m, and reported total annual CEO compensation of AU$287k for the year to December 2020. We note that's a small decrease of 4.5% on last year. In particular, the salary of AU$239.6k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below AU$258m, we found that the median total CEO compensation was AU$291k. From this we gather that Jane Bennett is paid around the median for CEOs in the industry. Moreover, Jane Bennett also holds AU$463k worth of TasFoods stock directly under their own name.

Component	2020	2019	Proportion (2020)
Salary	AU$240k	AU$240k	84%
Other	AU$47k	AU$60k	16%
Total Compensation	AU$287k	AU$300k	100%

On an industry level, roughly 81% of total compensation represents salary and 19% is other remuneration. TasFoods is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at TasFoods Limited's Growth Numbers

TasFoods Limited's earnings per share (EPS) grew 13% per year over the last three years. In the last year, its revenue is up 32%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has TasFoods Limited Been A Good Investment?

With a three year total loss of 12% for the shareholders, TasFoods Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. 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 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 3 warning signs for TasFoods (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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