Here's Why It's Unlikely That Royal Unibrew A/S' (CPH:RBREW) CEO Will See A Pay Rise This Year

Key Insights

• Royal Unibrew's Annual General Meeting to take place on 30th of April
• CEO Lars Jensen's total compensation includes salary of kr.8.59m
• The overall pay is 200% above the industry average
• Royal Unibrew's three-year loss to shareholders was 27% while its EPS was down 4.1% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at Royal Unibrew A/S (CPH:RBREW) recently. At the upcoming AGM on 30th of April, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Royal Unibrew

Comparing Royal Unibrew A/S' CEO Compensation With The Industry

Our data indicates that Royal Unibrew A/S has a market capitalization of kr.26b, and total annual CEO compensation was reported as kr.21m for the year to December 2023. We note that's an increase of 43% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at kr.8.6m.

In comparison with other companies in the Denmark Beverage industry with market capitalizations ranging from kr.14b to kr.45b, the reported median CEO total compensation was kr.7.1m. Accordingly, our analysis reveals that Royal Unibrew A/S pays Lars Jensen north of the industry median. What's more, Lars Jensen holds kr.45m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	kr.8.6m	kr.8.3m	41%
Other	kr.13m	kr.6.5m	59%
Total Compensation	kr.21m	kr.15m	100%

On an industry level, roughly 53% of total compensation represents salary and 47% is other remuneration. Royal Unibrew sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Royal Unibrew A/S' Growth Numbers

Royal Unibrew A/S has reduced its earnings per share by 4.1% a year over the last three years. Its revenue is up 14% over the last year.

Few shareholders would be pleased to read that EPS have declined. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Royal Unibrew A/S Been A Good Investment?

Given the total shareholder loss of 27% over three years, many shareholders in Royal Unibrew A/S are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for Royal Unibrew that investors should look into moving forward.

Important note: Royal Unibrew 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.