It's Unlikely That Bapcor Limited's (ASX:BAP) CEO Will See A Huge Pay Rise This Year

CEO Darryl Abotomey has done a decent job of delivering relatively good performance at Bapcor Limited (ASX:BAP) recently. As shareholders go into the upcoming AGM on 19 October 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Bapcor

How Does Total Compensation For Darryl Abotomey Compare With Other Companies In The Industry?

Our data indicates that Bapcor Limited has a market capitalization of AU$2.5b, and total annual CEO compensation was reported as AU$3.8m for the year to June 2021. We note that's an increase of 35% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$1.3m.

On examining similar-sized companies in the industry with market capitalizations between AU$1.4b and AU$4.3b, we discovered that the median CEO total compensation of that group was AU$711k. Hence, we can conclude that Darryl Abotomey is remunerated higher than the industry median. Furthermore, Darryl Abotomey directly owns AU$11m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
Salary	AU$1.3m	AU$1.2m	34%
Other	AU$2.5m	AU$1.6m	66%
Total Compensation	AU$3.8m	AU$2.8m	100%

Speaking on an industry level, nearly 63% of total compensation represents salary, while the remainder of 38% is other remuneration. It's interesting to note that Bapcor allocates a smaller portion of compensation to salary 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.

Bapcor Limited's Growth

Bapcor Limited's earnings per share (EPS) grew 4.9% per year over the last three years. Its revenue is up 20% over the last year.

This revenue growth could really point to a brighter future. And the modest growth in EPS isn't bad, either. Although we'll stop short of calling the stock a top performer, we think the company has potential. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Bapcor Limited Been A Good Investment?

Bapcor Limited has generated a total shareholder return of 13% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Bapcor 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.

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.

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