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

Key Insights

• Redrow will host its Annual General Meeting on 10th of November
• Total pay for CEO Matthew Brennan-Pratt includes UK£656.0k salary
• The overall pay is 247% above the industry average
• Over the past three years, Redrow's EPS grew by 41% and over the past three years, the total shareholder return was 34%

CEO Matthew Brennan-Pratt has done a decent job of delivering relatively good performance at Redrow plc (LON:RDW) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 10th of November. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Redrow

How Does Total Compensation For Matthew Brennan-Pratt Compare With Other Companies In The Industry?

Our data indicates that Redrow plc has a market capitalization of UK£1.6b, and total annual CEO compensation was reported as UK£2.1m for the year to July 2023. We note that's an increase of 30% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at UK£656k.

In comparison with other companies in the British Consumer Durables industry with market capitalizations ranging from UK£808m to UK£2.6b, the reported median CEO total compensation was UK£601k. This suggests that Matthew Brennan-Pratt is paid more than the median for the industry. Moreover, Matthew Brennan-Pratt also holds UK£550k worth of Redrow stock directly under their own name.

Component	2023	2022	Proportion (2023)
Salary	UK£656k	UK£625k	31%
Other	UK£1.4m	UK£976k	69%
Total Compensation	UK£2.1m	UK£1.6m	100%

On an industry level, roughly 41% of total compensation represents salary and 59% is other remuneration. Redrow pays a modest slice of remuneration through salary, as compared 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.

Redrow plc's Growth

Redrow plc has seen its earnings per share (EPS) increase by 41% a year over the past three years. Revenue was pretty flat on last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Redrow plc Been A Good Investment?

We think that the total shareholder return of 34%, over three years, would leave most Redrow plc shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar 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. 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 2 warning signs for Redrow (1 is concerning!) that you should be aware of before investing here.

Switching gears from Redrow, 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.