Here's Why Shareholders Should Examine Mulberry Group plc's (LON:MUL) CEO Compensation Package More Closely

By
Simply Wall St
Published
September 01, 2021
AIM:MUL
Source: Shutterstock

Shareholders will probably not be too impressed with the underwhelming results at Mulberry Group plc (LON:MUL) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 08 September 2021. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for Mulberry Group

Comparing Mulberry Group plc's CEO Compensation With the industry

Our data indicates that Mulberry Group plc has a market capitalization of UK£165m, and total annual CEO compensation was reported as UK£1.3m for the year to March 2021. We note that's an increase of 17% above last year. In particular, the salary of UK£673.0k, makes up a fairly large portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the industry with market capitalizations between UK£73m and UK£290m, we discovered that the median CEO total compensation of that group was UK£458k. Hence, we can conclude that Thierry Andretta is remunerated higher than the industry median. Moreover, Thierry Andretta also holds UK£136k worth of Mulberry Group stock directly under their own name.

Component20212020Proportion (2021)
Salary UK£673k UK£673k 53%
Other UK£593k UK£407k 47%
Total CompensationUK£1.3m UK£1.1m100%

Talking in terms of the industry, salary represented approximately 74% of total compensation out of all the companies we analyzed, while other remuneration made up 26% of the pie. It's interesting to note that Mulberry Group allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
AIM:MUL CEO Compensation September 2nd 2021

Mulberry Group plc's Growth

Mulberry Group plc has reduced its earnings per share by 9.3% a year over the last three years. It saw its revenue drop 23% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Mulberry Group plc Been A Good Investment?

The return of -30% over three years would not have pleased Mulberry Group plc shareholders. 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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

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. That's why we did some digging and identified 2 warning signs for Mulberry Group that investors should think about before committing capital to this stock.

Important note: Mulberry 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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