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

Key Insights

• Macfarlane Group to hold its Annual General Meeting on 13th of May
• Total pay for CEO Peter Atkinson includes UK£452.0k salary
• The overall pay is 99% above the industry average
• Over the past three years, Macfarlane Group's EPS grew by 3.8% and over the past three years, the total loss to shareholders 8.5%

We've discovered 2 warning signs about Macfarlane Group. View them for free.

In the past three years, shareholders of Macfarlane Group PLC (LON:MACF) have seen a loss on their investment. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 13th of May. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for Macfarlane Group

Comparing Macfarlane Group PLC's CEO Compensation With The Industry

According to our data, Macfarlane Group PLC has a market capitalization of UK£161m, and paid its CEO total annual compensation worth UK£1.0m over the year to December 2024. Notably, that's a decrease of 26% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at UK£452k.

For comparison, other companies in the British Trade Distributors industry with market capitalizations ranging between UK£75m and UK£301m had a median total CEO compensation of UK£503k. Accordingly, our analysis reveals that Macfarlane Group PLC pays Peter Atkinson north of the industry median. Moreover, Peter Atkinson also holds UK£1.5m worth of Macfarlane Group stock directly under their own name.

Component	2024	2023	Proportion (2024)
Salary	UK£452k	UK£435k	45%
Other	UK£550k	UK£926k	55%
Total Compensation	UK£1.0m	UK£1.4m	100%

On an industry level, roughly 68% of total compensation represents salary and 32% 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.

Macfarlane Group PLC's Growth

Macfarlane Group PLC's earnings per share (EPS) grew 3.8% per year over the last three years. In the last year, its revenue is down 3.7%.

We would prefer it if there was revenue growth, but the modest EPS growth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Macfarlane Group PLC Been A Good Investment?

With a three year total loss of 8.5% for the shareholders, Macfarlane Group PLC would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Macfarlane Group that investors should think about before committing capital to this stock.

Important note: Macfarlane Group 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.