Shareholders Will Probably Hold Off On Increasing RBG Holdings plc's (LON:RBGP) CEO Compensation For The Time Being

Performance at RBG Holdings plc (LON:RBGP) has been reasonably good and CEO Nicky Foulston 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 17 June 2021. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for RBG Holdings

Comparing RBG Holdings plc's CEO Compensation With the industry

According to our data, RBG Holdings plc has a market capitalization of UK£131m, and paid its CEO total annual compensation worth UK£433k over the year to December 2020. That's a modest increase of 4.0% on the prior year. Notably, the salary which is UK£421.5k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations ranging from UK£71m to UK£283m, the reported median CEO total compensation was UK£322k. Accordingly, our analysis reveals that RBG Holdings plc pays Nicky Foulston north of the industry median. Moreover, Nicky Foulston also holds UK£16m worth of RBG Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	UK£422k	UK£402k	97%
Other	UK£12k	UK£14k	3%
Total Compensation	UK£433k	UK£416k	100%

On an industry level, around 84% of total compensation represents salary and 16% is other remuneration. Investors will find it interesting that RBG Holdings pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at RBG Holdings plc's Growth Numbers

RBG Holdings plc has seen its earnings per share (EPS) increase by 7.9% a year over the past three years. In the last year, its revenue is up 7.8%.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but it is good to see modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. 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 RBG Holdings plc Been A Good Investment?

RBG Holdings plc has generated a total shareholder return of 21% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

RBG Holdings pays its CEO a majority of compensation through a salary. 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. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

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 3 warning signs for RBG Holdings that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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This article by Simply Wall St is general in nature. 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.
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