This Is Why Associated British Foods plc's (LON:ABF) CEO Compensation Looks Appropriate

Key Insights

• Associated British Foods' Annual General Meeting to take place on 8th of December
• CEO George Weston's total compensation includes salary of UK£1.12m
• The overall pay is comparable to the industry average
• Over the past three years, Associated British Foods' EPS grew by 34% and over the past three years, the total shareholder return was 9.1%

Performance at Associated British Foods plc (LON:ABF) has been reasonably good and CEO George Weston 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 8th of December. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

See our latest analysis for Associated British Foods

Comparing Associated British Foods plc's CEO Compensation With The Industry

At the time of writing, our data shows that Associated British Foods plc has a market capitalization of UK£18b, and reported total annual CEO compensation of UK£4.1m for the year to September 2023. We note that's an increase of 79% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£1.1m.

For comparison, other companies in the British Food industry with market capitalizations above UK£6.3b, reported a median total CEO compensation of UK£4.1m. From this we gather that George Weston is paid around the median for CEOs in the industry. Furthermore, George Weston directly owns UK£91m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	UK£1.1m	UK£1.1m	27%
Other	UK£3.0m	UK£1.2m	73%
Total Compensation	UK£4.1m	UK£2.3m	100%

On an industry level, roughly 49% of total compensation represents salary and 51% is other remuneration. Associated British Foods sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Associated British Foods plc's Growth Numbers

Associated British Foods plc has seen its earnings per share (EPS) increase by 34% a year over the past three years. Its revenue is up 16% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 Associated British Foods plc Been A Good Investment?

Associated British Foods plc has generated a total shareholder return of 9.1% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

Shareholders may want to check for free if Associated British Foods insiders are buying or selling shares.

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. 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.