Why We Think Shareholders May Be Considering Bumping Up Suncorp Group Limited's (ASX:SUN) CEO Compensation

Key Insights

• Suncorp Group to hold its Annual General Meeting on 26th of September
• Total pay for CEO Steve Johnston includes AU$2.03m salary
• The overall pay is 62% below the industry average
• Over the past three years, Suncorp Group's EPS grew by 22% and over the past three years, the total shareholder return was 86%

Shareholders will be pleased by the impressive results for Suncorp Group Limited (ASX:SUN) recently and CEO Steve Johnston has played a key role. At the upcoming AGM on 26th of September, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

See our latest analysis for Suncorp Group

How Does Total Compensation For Steve Johnston Compare With Other Companies In The Industry?

At the time of writing, our data shows that Suncorp Group Limited has a market capitalization of AU$18b, and reported total annual CEO compensation of AU$3.9m for the year to June 2023. We note that's a decrease of 21% compared to last year. Notably, the salary which is AU$2.03m, represents a considerable chunk of the total compensation being paid.

For comparison, other companies in the Australian Insurance industry with market capitalizations above AU$12b, reported a median total CEO compensation of AU$10m. This suggests that Steve Johnston is paid below the industry median. Furthermore, Steve Johnston directly owns AU$5.1m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	AU$2.0m	AU$1.9m	52%
Other	AU$1.8m	AU$3.0m	48%
Total Compensation	AU$3.9m	AU$4.9m	100%

Speaking on an industry level, nearly 52% of total compensation represents salary, while the remainder of 48% is other remuneration. Although there is a difference in how total compensation is set, Suncorp Group more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Suncorp Group Limited's Growth Numbers

Suncorp Group Limited has seen its earnings per share (EPS) increase by 22% a year over the past three years. In the last year, its revenue is up 22%.

Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 Suncorp Group Limited Been A Good Investment?

Boasting a total shareholder return of 86% over three years, Suncorp Group Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for Suncorp Group (1 is concerning!) that you should be aware of before investing here.

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.