We Think Some Shareholders May Hesitate To Increase Wagners Holding Company Limited's (ASX:WGN) CEO Compensation

The underwhelming share price performance of Wagners Holding Company Limited (ASX:WGN) in the past three years would have disappointed many shareholders. Per share earnings growth is also lacking, despite revenue growth. The AGM coming up on 27 October 2021 will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. Here's why we think shareholders should hold off on 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

Our data indicates that Wagners Holding Company Limited has a market capitalization of AU$328m, and total annual CEO compensation was reported as AU$821k for the year to June 2021. That's a notable increase of 45% on last year. In particular, the salary of AU$538.4k, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the industry with market capitalizations between AU$134m and AU$535m, we discovered that the median CEO total compensation of that group was AU$575k. Hence, we can conclude that Cameron Coleman is remunerated higher than the industry median. What's more, Cameron Coleman holds AU$146k worth of shares in the company in their own name.

Component	2021	2020	Proportion (2021)
Salary	AU$538k	AU$502k	66%
Other	AU$283k	AU$66k	34%
Total Compensation	AU$821k	AU$568k	100%

Speaking on an industry level, nearly 57% of total compensation represents salary, while the remainder of 43% is other remuneration. Wagners Holding pays out 66% of remuneration in the form of a salary, significantly higher than the industry average. 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 Wagners Holding Company Limited's Growth Numbers

Over the last three years, Wagners Holding Company Limited has shrunk its earnings per share by 32% per year. In the last year, its revenue is up 28%.

The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Wagners Holding Company Limited Been A Good Investment?

With a total shareholder return of -58% over three years, Wagners Holding Company Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Wagners Holding that investors should look into moving forward.

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.

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.