Here's Why Shareholders May Want To Be Cautious With Increasing Greggs plc's (LON:GRG) CEO Pay Packet

Key Insights

• Greggs' Annual General Meeting to take place on 21st of May
• CEO Roisin Currie's total compensation includes salary of UK£652.1k
• The total compensation is similar to the average for the industry
• Over the past three years, Greggs' EPS grew by 9.3% and over the past three years, the total loss to shareholders 2.8%

Our free stock report includes 3 warning signs investors should be aware of before investing in Greggs. Read for free now.

As many shareholders of Greggs plc (LON:GRG) will be aware, they have not made a gain on their investment in the past three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 21st of May. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Greggs

How Does Total Compensation For Roisin Currie Compare With Other Companies In The Industry?

At the time of writing, our data shows that Greggs plc has a market capitalization of UK£2.0b, and reported total annual CEO compensation of UK£1.8m for the year to December 2024. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£652k.

On examining similar-sized companies in the British Hospitality industry with market capitalizations between UK£1.5b and UK£4.8b, we discovered that the median CEO total compensation of that group was UK£1.8m. From this we gather that Roisin Currie is paid around the median for CEOs in the industry. Furthermore, Roisin Currie directly owns UK£647k worth of shares in the company.

Component	2024	2023	Proportion (2024)
Salary	UK£652k	UK£624k	36%
Other	UK£1.2m	UK£1.1m	64%
Total Compensation	UK£1.8m	UK£1.8m	100%

Speaking on an industry level, nearly 44% of total compensation represents salary, while the remainder of 56% is other remuneration. In Greggs' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Greggs plc's Growth Numbers

Greggs plc has seen its earnings per share (EPS) increase by 9.3% a year over the past three years. It achieved revenue growth of 11% over the last year.

We would argue that the modest growth in revenue is a notable positive. And the improvement in EPSis modest but respectable. So while we'd stop just short of calling this a top performer, but we think it is well 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 Greggs plc Been A Good Investment?

Given the total shareholder loss of 2.8% over three years, many shareholders in Greggs plc are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. 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. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Greggs (2 are a bit unpleasant!) that you should be aware of before investing here.

Important note: Greggs 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.