It would be hard to discount the role that CEO Stefan Bomhard has played in delivering the impressive results at Imperial Brands PLC (LON:IMB) recently. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 01 February 2023. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.
Check out our latest analysis for Imperial Brands
Comparing Imperial Brands PLC's CEO Compensation With The Industry
Our data indicates that Imperial Brands PLC has a market capitalization of UK£19b, and total annual CEO compensation was reported as UK£5.7m for the year to September 2022. Notably, that's an increase of 65% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at UK£1.3m.
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£4.8m. From this we gather that Stefan Bomhard is paid around the median for CEOs in the industry. Moreover, Stefan Bomhard also holds UK£1.1m worth of Imperial Brands stock directly under their own name.
| Component | 2022 | 2021 | Proportion (2022) |
| Salary | UK£1.3m | UK£1.3m | 23% |
| Other | UK£4.4m | UK£2.2m | 77% |
| Total Compensation | UK£5.7m | UK£3.5m | 100% |
On an industry level, around 35% of total compensation represents salary and 65% is other remuneration. Imperial Brands pays a modest slice of remuneration through salary, as compared 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's earnings per share (EPS) grew 17% per year over the last three years. It achieved revenue growth of 2.1% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Imperial Brands PLC Been A Good Investment?
Boasting a total shareholder return of 38% over three years, Imperial Brands PLC has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
To Conclude...
The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for Imperial Brands that you should be aware of before investing.
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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.
About LSE:IMB
Imperial Brands
Manufactures, imports, markets, and sells tobacco and tobacco-related products in Europe, the Americas, Africa, the Asia, Australasia, and internationally.
Undervalued with solid track record and pays a dividend.
