A.G. BARR p.l.c.'s (LON:BAG) CEO Might Not Expect Shareholders To Be So Generous This Year

By
Simply Wall St
Published
May 21, 2021
LSE:BAG
Source: Shutterstock

Shareholders will probably not be too impressed with the underwhelming results at A.G. BARR p.l.c. (LON:BAG) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 28 May 2021. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for A.G. BARR

Comparing A.G. BARR p.l.c.'s CEO Compensation With the industry

At the time of writing, our data shows that A.G. BARR p.l.c. has a market capitalization of UK£601m, and reported total annual CEO compensation of UK£710k for the year to January 2021. We note that's a small decrease of 3.9% on last year. In particular, the salary of UK£451.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between UK£282m and UK£1.1b had a median total CEO compensation of UK£500k. This suggests that Roger White is paid more than the median for the industry. What's more, Roger White holds UK£2.0m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20212020Proportion (2021)
Salary UK£451k UK£471k 64%
Other UK£259k UK£268k 36%
Total CompensationUK£710k UK£739k100%

Talking in terms of the industry, salary represented approximately 61% of total compensation out of all the companies we analyzed, while other remuneration made up 39% of the pie. Our data reveals that A.G. BARR allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
LSE:BAG CEO Compensation May 22nd 2021

A Look at A.G. BARR p.l.c.'s Growth Numbers

A.G. BARR p.l.c. has reduced its earnings per share by 19% a year over the last three years. In the last year, its revenue is down 11%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has A.G. BARR p.l.c. Been A Good Investment?

Given the total shareholder loss of 20% over three years, many shareholders in A.G. BARR p.l.c. are probably rather dissatisfied, to say the least. 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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for A.G. BARR that investors should think about before committing capital to this stock.

Important note: A.G. BARR 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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