Here's Why Shareholders Should Examine PZ Cussons plc's (LON:PZC) CEO Compensation Package More Closely

Key Insights

• PZ Cussons will host its Annual General Meeting on 21st of November
• Total pay for CEO Jonathan Myers includes UK£633.2k salary
• The total compensation is 257% higher than the average for the industry
• Over the past three years, PZ Cussons' EPS fell by 76% and over the past three years, the total loss to shareholders 58%

PZ Cussons plc (LON:PZC) has not performed well recently and CEO Jonathan Myers will probably need to up their game. At the upcoming AGM on 21st of November, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for PZ Cussons

Comparing PZ Cussons plc's CEO Compensation With The Industry

According to our data, PZ Cussons plc has a market capitalization of UK£325m, and paid its CEO total annual compensation worth UK£1.4m over the year to May 2024. We note that's a decrease of 11% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at UK£633k.

In comparison with other companies in the British Personal Products industry with market capitalizations ranging from UK£157m to UK£630m, the reported median CEO total compensation was UK£390k. This suggests that Jonathan Myers is paid more than the median for the industry. Moreover, Jonathan Myers also holds UK£228k worth of PZ Cussons stock directly under their own name.

Component	2024	2023	Proportion (2024)
Salary	UK£633k	UK£608k	46%
Other	UK£758k	UK£961k	54%
Total Compensation	UK£1.4m	UK£1.6m	100%

On an industry level, around 58% of total compensation represents salary and 42% is other remuneration. It's interesting to note that PZ Cussons allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

PZ Cussons plc's Growth

Over the last three years, PZ Cussons plc has shrunk its earnings per share by 76% per year. Its revenue is down 20% over the previous year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 PZ Cussons plc Been A Good Investment?

Few PZ Cussons plc shareholders would feel satisfied with the return of -58% over three years. 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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for PZ Cussons that investors should look into moving forward.

Important note: PZ Cussons 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.