This Is Why Shareholders May Want To Hold Back On A Pay Rise For Pollard Banknote Limited's (TSE:PBL) CEO

Key Insights

• Pollard Banknote to hold its Annual General Meeting on 9th of May
• Salary of CA$387.0k is part of CEO John Pollard's total remuneration
• Total compensation is 88% below industry average
• Pollard Banknote's EPS declined by 3.6% over the past three years while total shareholder loss over the past three years was 36%

Performance at Pollard Banknote Limited (TSE:PBL) has not been particularly rosy recently and shareholders will likely be holding CEO John Pollard and the board accountable for this. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 9th of May. The data we gathered below shows that CEO compensation looks acceptable for now.

View our latest analysis for Pollard Banknote

How Does Total Compensation For John Pollard Compare With Other Companies In The Industry?

According to our data, Pollard Banknote Limited has a market capitalization of CA$982m, and paid its CEO total annual compensation worth CA$688k over the year to December 2023. That's a notable increase of 78% on last year. We note that the salary of CA$387.0k makes up a sizeable portion of the total compensation received by the CEO.

On examining similar-sized companies in the Canadian Hospitality industry with market capitalizations between CA$547m and CA$2.2b, we discovered that the median CEO total compensation of that group was CA$5.5m. This suggests that John Pollard is paid below the industry median. Moreover, John Pollard also holds CA$207m worth of Pollard Banknote stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	CA$387k	CA$289k	56%
Other	CA$301k	CA$98k	44%
Total Compensation	CA$688k	CA$387k	100%

Speaking on an industry level, nearly 72% of total compensation represents salary, while the remainder of 28% is other remuneration. Pollard Banknote sets aside a smaller share of compensation for 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.

A Look at Pollard Banknote Limited's Growth Numbers

Over the last three years, Pollard Banknote Limited has shrunk its earnings per share by 3.6% per year. It achieved revenue growth of 7.6% over the last year.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Pollard Banknote Limited Been A Good Investment?

The return of -36% over three years would not have pleased Pollard Banknote Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

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. In our study, we found 2 warning signs for Pollard Banknote you should be aware of, and 1 of them doesn't sit too well with us.

Important note: Pollard Banknote 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.