Here's Why Shareholders May Want To Be Cautious With Increasing Macfarlane Group PLC's (LON:MACF) CEO Pay Packet

Key Insights

• Macfarlane Group will host its Annual General Meeting on 7th of May
• Total pay for CEO Peter Atkinson includes UK£435.0k salary
• The overall pay is 189% above the industry average
• Macfarlane Group's total shareholder return over the past three years was 33% while its EPS grew by 15% over the past three years

CEO Peter Atkinson has done a decent job of delivering relatively good performance at Macfarlane Group PLC (LON:MACF) recently. As shareholders go into the upcoming AGM on 7th of May, 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 want to keep CEO compensation within reason.

View our latest analysis for Macfarlane Group

How Does Total Compensation For Peter Atkinson Compare With Other Companies In The Industry?

Our data indicates that Macfarlane Group PLC has a market capitalization of UK£230m, and total annual CEO compensation was reported as UK£1.4m for the year to December 2023. Notably, that's an increase of 17% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at UK£435k.

For comparison, other companies in the British Trade Distributors industry with market capitalizations ranging between UK£80m and UK£320m had a median total CEO compensation of UK£472k. Accordingly, our analysis reveals that Macfarlane Group PLC pays Peter Atkinson north of the industry median. Furthermore, Peter Atkinson directly owns UK£2.1m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	UK£435k	UK£405k	32%
Other	UK£926k	UK£756k	68%
Total Compensation	UK£1.4m	UK£1.2m	100%

Speaking on an industry level, nearly 58% of total compensation represents salary, while the remainder of 42% is other remuneration. In Macfarlane Group's 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.

A Look at Macfarlane Group PLC's Growth Numbers

Macfarlane Group PLC has seen its earnings per share (EPS) increase by 15% a year over the past three years. Its revenue is down 3.3% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Macfarlane Group PLC Been A Good Investment?

Boasting a total shareholder return of 33% over three years, Macfarlane Group PLC has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus 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 Macfarlane Group that investors should look into moving forward.

Switching gears from Macfarlane Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.