Most Shareholders Will Probably Agree With Chesnara plc's (LON:CSN) CEO Compensation

Key Insights

• Chesnara will host its Annual General Meeting on 13th of May
• Salary of UK£525.0k is part of CEO Steve Murray's total remuneration
• The total compensation is similar to the average for the industry
• Chesnara's total shareholder return over the past three years was 23% while its EPS was down 48% over the past three years

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Despite positive share price growth of 23% for Chesnara plc (LON:CSN) over the last few years, earnings growth has been disappointing, which suggests something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 13th of May. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

View our latest analysis for Chesnara

Comparing Chesnara plc's CEO Compensation With The Industry

According to our data, Chesnara plc has a market capitalization of UK£397m, and paid its CEO total annual compensation worth UK£1.4m over the year to December 2024. Notably, that's an increase of 16% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at UK£525k.

On examining similar-sized companies in the British Insurance industry with market capitalizations between UK£150m and UK£602m, we discovered that the median CEO total compensation of that group was UK£1.3m. So it looks like Chesnara compensates Steve Murray in line with the median for the industry. Furthermore, Steve Murray directly owns UK£631k worth of shares in the company.

Speaking on an industry level, nearly 23% of total compensation represents salary, while the remainder of 77% is other remuneration. Chesnara pays out 38% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Chesnara plc's Growth Numbers

Chesnara plc has reduced its earnings per share by 48% a year over the last three years. In the last year, its revenue changed by just 0.6%.

Overall this is not a very positive result for shareholders. And the flat revenue is seriously uninspiring. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Chesnara plc Been A Good Investment?

With a total shareholder return of 23% over three years, Chesnara plc shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Chesnara you should be aware of, and 1 of them shouldn't be ignored.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.