Amcor plc's (ASX:AMC) CEO Compensation Looks Acceptable To Us And Here's Why

By
Simply Wall St
Published
November 04, 2021
ASX:AMC
Source: Shutterstock

Performance at Amcor plc (ASX:AMC) has been reasonably good and CEO Ron Delia has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 10 November 2021. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

See our latest analysis for Amcor

Comparing Amcor plc's CEO Compensation With the industry

According to our data, Amcor plc has a market capitalization of AU$25b, and paid its CEO total annual compensation worth US$11m over the year to June 2021. We note that's a decrease of 28% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.7m.

On comparing similar companies in the industry with market capitalizations above AU$11b, we found that the median total CEO compensation was US$10m. So it looks like Amcor compensates Ron Delia in line with the median for the industry. Moreover, Ron Delia also holds AU$24m worth of Amcor stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20212020Proportion (2021)
Salary US$1.7m US$1.6m 15%
Other US$9.3m US$14m 85%
Total CompensationUS$11m US$15m100%

Speaking on an industry level, nearly 62% of total compensation represents salary, while the remainder of 38% is other remuneration. In Amcor's case, non-salary compensation represents a greater slice of total remuneration, in comparison 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.

ceo-compensation
ASX:AMC CEO Compensation November 4th 2021

Amcor plc's Growth

Over the past three years, Amcor plc has seen its earnings per share (EPS) grow by 9.8% per year. In the last year, its revenue is up 6.1%.

We'd prefer higher revenue growth, but it is good to see modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Amcor plc Been A Good Investment?

Boasting a total shareholder return of 38% over three years, Amcor plc has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Amcor that you should be aware of before investing.

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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