Increases to CEO Compensation Might Be Put On Hold For Now at Imperial Brands PLC (LON:IMB)

Key Insights

• Imperial Brands will host its Annual General Meeting on 29th of January
• Total pay for CEO Stefan Bomhard includes UK£1.40m salary
• The total compensation is 155% higher than the average for the industry
• Imperial Brands' EPS grew by 1.8% over the past three years while total shareholder return over the past three years was 88%

Performance at Imperial Brands PLC (LON:IMB) has been reasonably good and CEO Stefan Bomhard 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 29th of January. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Imperial Brands

How Does Total Compensation For Stefan Bomhard Compare With Other Companies In The Industry?

Our data indicates that Imperial Brands PLC has a market capitalization of UK£21b, and total annual CEO compensation was reported as UK£9.1m for the year to September 2024. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at UK£1.4m.

In comparison with other companies in the the United Kingdom Tobacco industry with market capitalizations over UK£6.5b, the reported median total CEO compensation was UK£3.6m. This suggests that Stefan Bomhard is paid more than the median for the industry. Moreover, Stefan Bomhard also holds UK£11m worth of Imperial Brands stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	UK£1.4m	UK£1.3m	15%
Other	UK£7.7m	UK£7.6m	85%
Total Compensation	UK£9.1m	UK£8.9m	100%

On an industry level, around 31% of total compensation represents salary and 69% is other remuneration. In Imperial Brands' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Imperial Brands PLC's Growth Numbers

Imperial Brands PLC has seen its earnings per share (EPS) increase by 1.8% a year over the past three years. Its revenue is up 2.3% over the last year.

We'd prefer higher revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Imperial Brands PLC Been A Good Investment?

Boasting a total shareholder return of 88% over three years, Imperial Brands PLC has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 1 which is concerning) in Imperial Brands we think you should know about.

Important note: Imperial Brands 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.