Key Insights
- BAE Systems will host its Annual General Meeting on 7th of May
- CEO Charles Woodburn's total compensation includes salary of UK£1.23m
- Total compensation is 284% above industry average
- BAE Systems' EPS grew by 5.8% over the past three years while total shareholder return over the past three years was 143%
Performance at BAE Systems plc (LON:BA.) has been reasonably good and CEO Charles Woodburn has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 7th of May. However, some shareholders may still want to keep CEO compensation within reason.
See our latest analysis for BAE Systems
Comparing BAE Systems plc's CEO Compensation With The Industry
Our data indicates that BAE Systems plc has a market capitalization of UK£52b, and total annual CEO compensation was reported as UK£12m for the year to December 2024. We note that's a decrease of 13% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at UK£1.2m.
On comparing similar companies in the British Aerospace & Defense industry with market capitalizations above UK£6.0b, we found that the median total CEO compensation was UK£3.0m. Hence, we can conclude that Charles Woodburn is remunerated higher than the industry median. Furthermore, Charles Woodburn directly owns UK£16m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | UK£1.2m | UK£1.2m | 11% |
| Other | UK£10m | UK£12m | 89% |
| Total Compensation | UK£12m | UK£13m | 100% |
Talking in terms of the industry, salary represented approximately 42% of total compensation out of all the companies we analyzed, while other remuneration made up 58% of the pie. In BAE Systems' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
BAE Systems plc's Growth
BAE Systems plc has seen its earnings per share (EPS) increase by 5.8% a year over the past three years. It achieved revenue growth of 14% over the last year.
This revenue growth could really point to a brighter future. And the modest growth in EPS isn't bad, either. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has BAE Systems plc Been A Good Investment?
We think that the total shareholder return of 143%, over three years, would leave most BAE Systems plc shareholders smiling. 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...
Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.
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 2 warning signs for BAE Systems that investors should look into moving forward.
Important note: BAE Systems 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.
Valuation is complex, but we're here to simplify it.
Discover if BAE Systems might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
Access Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.