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

Key Insights

• Nichols to hold its Annual General Meeting on 23rd of April
• Salary of UK£386.0k is part of CEO Andrew Milne's total remuneration
• The total compensation is 333% higher than the average for the industry
• Over the past three years, Nichols' EPS grew by 93% and over the past three years, the total loss to shareholders 2.8%

Our free stock report includes 2 warning signs investors should be aware of before investing in Nichols. Read for free now.

In the past three years, shareholders of Nichols plc (LON:NICL) 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. The AGM coming up on the 23rd of April could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. 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 Nichols

Comparing Nichols plc's CEO Compensation With The Industry

At the time of writing, our data shows that Nichols plc has a market capitalization of UK£438m, and reported total annual CEO compensation of UK£1.4m for the year to December 2024. That's mostly flat as compared to the prior year's compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at UK£386k.

On examining similar-sized companies in the British Beverage industry with market capitalizations between UK£151m and UK£605m, we discovered that the median CEO total compensation of that group was UK£322k. Accordingly, our analysis reveals that Nichols plc pays Andrew Milne north of the industry median. What's more, Andrew Milne holds UK£435k worth of shares in the company in their own name.

Component	2024	2023	Proportion (2024)
Salary	UK£386k	UK£365k	28%
Other	UK£1.0m	UK£993k	72%
Total Compensation	UK£1.4m	UK£1.4m	100%

Talking in terms of the industry, salary represented approximately 64% of total compensation out of all the companies we analyzed, while other remuneration made up 36% of the pie. Nichols sets aside a smaller share of compensation for salary, in comparison to the overall 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 Nichols plc's Growth Numbers

Nichols plc's earnings per share (EPS) grew 93% per year over the last three years. Its revenue is up 1.2% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Nichols plc Been A Good Investment?

With a three year total loss of 2.8% for the shareholders, Nichols plc would certainly have some dissatisfied shareholders. 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 fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. 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 Nichols that you should be aware of before investing.

Switching gears from Nichols, 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.