Increases to Brickworks Limited's (ASX:BKW) CEO Compensation Might Cool off for now

Performance at Brickworks Limited (ASX:BKW) has been reasonably good and CEO Lindsay Partridge 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 23 November 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Brickworks

How Does Total Compensation For Lindsay Partridge Compare With Other Companies In The Industry?

Our data indicates that Brickworks Limited has a market capitalization of AU$3.5b, and total annual CEO compensation was reported as AU$3.5m for the year to July 2021. We note that's an increase of 21% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$1.5m.

On examining similar-sized companies in the industry with market capitalizations between AU$2.7b and AU$8.7b, we discovered that the median CEO total compensation of that group was AU$2.6m. Accordingly, our analysis reveals that Brickworks Limited pays Lindsay Partridge north of the industry median. What's more, Lindsay Partridge holds AU$5.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	AU$1.5m	AU$1.5m	44%
Other	AU$1.9m	AU$1.3m	56%
Total Compensation	AU$3.5m	AU$2.9m	100%

On an industry level, around 57% of total compensation represents salary and 43% is other remuneration. In Brickworks' 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 Brickworks Limited's Growth Numbers

Brickworks Limited has seen its earnings per share (EPS) increase by 9.9% a year over the past three years. In the last year, its revenue is down 6.3%.

We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Brickworks Limited Been A Good Investment?

Boasting a total shareholder return of 65% over three years, Brickworks 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.

To Conclude...

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. 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 identified 2 warning signs for Brickworks (1 can't be ignored!) that you should be aware of before investing here.

Important note: Brickworks 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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.