Here's Why Shareholders May Want To Be Cautious With Increasing Wagners Holding Company Limited's (ASX:WGN) CEO Pay Packet

Key Insights

• Wagners Holding to hold its Annual General Meeting on 28th of November
• Total pay for CEO Cameron Coleman includes AU$586.8k salary
• The total compensation is 492% higher than the average for the industry
• Wagners Holding's three-year loss to shareholders was 45% while its EPS grew by 5.0% over the past three years

The underwhelming share price performance of Wagners Holding Company Limited (ASX:WGN) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 28th of November could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Wagners Holding

Comparing Wagners Holding Company Limited's CEO Compensation With The Industry

According to our data, Wagners Holding Company Limited has a market capitalization of AU$178m, and paid its CEO total annual compensation worth AU$664k over the year to June 2023. That's a notable decrease of 17% on last year. Notably, the salary which is AU$586.8k, represents most of the total compensation being paid.

For comparison, other companies in the Australian Basic Materials industry with market capitalizations below AU$305m, reported a median total CEO compensation of AU$112k. Hence, we can conclude that Cameron Coleman is remunerated higher than the industry median. What's more, Cameron Coleman holds AU$153k worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	AU$587k	AU$551k	88%
Other	AU$78k	AU$251k	12%
Total Compensation	AU$664k	AU$802k	100%

Speaking on an industry level, nearly 44% of total compensation represents salary, while the remainder of 56% is other remuneration. Wagners Holding is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Wagners Holding Company Limited's Growth

Wagners Holding Company Limited's earnings per share (EPS) grew 5.0% per year over the last three years. Its revenue is up 41% over the last year.

We like the look of the strong year-on-year improvement in revenue. And in that context, the modest EPS improvement certainly isn't shabby. We wouldn't say this is necessarily top notch growth, but it is certainly promising. 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 Wagners Holding Company Limited Been A Good Investment?

The return of -45% over three years would not have pleased Wagners Holding Company Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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. We identified 2 warning signs for Wagners Holding (1 shouldn't be ignored!) that you should be aware of before investing here.

Important note: Wagners Holding 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.

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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.