This Is Why Super Retail Group Limited's (ASX:SUL) CEO Compensation Looks Appropriate

Key Insights

• Super Retail Group will host its Annual General Meeting on 24th of October
• CEO Anthony Heraghty's total compensation includes salary of AU$1.45m
• The overall pay is comparable to the industry average
• Super Retail Group's EPS declined by 7.3% over the past three years while total shareholder return over the past three years was 64%

The share price of Super Retail Group Limited (ASX:SUL) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. The upcoming AGM on 24th of October may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

Check out our latest analysis for Super Retail Group

Comparing Super Retail Group Limited's CEO Compensation With The Industry

According to our data, Super Retail Group Limited has a market capitalization of AU$3.9b, and paid its CEO total annual compensation worth AU$4.1m over the year to June 2024. That's a modest increase of 4.7% on the prior 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 Australian Specialty Retail industry with market capitalizations between AU$3.0b and AU$9.6b, we discovered that the median CEO total compensation of that group was AU$3.2m. From this we gather that Anthony Heraghty is paid around the median for CEOs in the industry. Moreover, Anthony Heraghty also holds AU$6.6m worth of Super Retail Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	AU$1.5m	AU$1.5m	35%
Other	AU$2.7m	AU$2.5m	65%
Total Compensation	AU$4.1m	AU$3.9m	100%

Speaking on an industry level, nearly 55% of total compensation represents salary, while the remainder of 45% is other remuneration. Super Retail Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Super Retail Group Limited's Growth Numbers

Over the last three years, Super Retail Group Limited has shrunk its earnings per share by 7.3% per year. It achieved revenue growth of 2.1% over the last year.

The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Super Retail Group Limited Been A Good Investment?

Most shareholders would probably be pleased with Super Retail Group Limited for providing a total return of 64% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. 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 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 Super Retail Group that you should be aware of before investing.

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.

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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.