Shareholders May Be A Bit More Conservative With Dunelm Group plc's (LON:DNLM) CEO Compensation For Now

Key Insights

• Dunelm Group's Annual General Meeting to take place on 21st of November
• CEO Nick Wilkinson's total compensation includes salary of UK£609.0k
• Total compensation is similar to the industry average
• Dunelm Group's EPS grew by 5.4% over the past three years while total shareholder loss over the past three years was 2.9%

As many shareholders of Dunelm Group plc (LON:DNLM) will be aware, they have not made a gain on their investment in the past three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 21st of November. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Dunelm Group

How Does Total Compensation For Nick Wilkinson Compare With Other Companies In The Industry?

Our data indicates that Dunelm Group plc has a market capitalization of UK£2.2b, and total annual CEO compensation was reported as UK£1.6m for the year to June 2024. That's a notable decrease of 16% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at UK£609k.

On comparing similar companies from the British Specialty Retail industry with market caps ranging from UK£1.6b to UK£5.1b, we found that the median CEO total compensation was UK£1.3m. So it looks like Dunelm Group compensates Nick Wilkinson in line with the median for the industry. What's more, Nick Wilkinson holds UK£5.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	UK£609k	UK£582k	37%
Other	UK£1.0m	UK£1.4m	63%
Total Compensation	UK£1.6m	UK£1.9m	100%

On an industry level, roughly 66% of total compensation represents salary and 34% is other remuneration. It's interesting to note that Dunelm Group allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Dunelm Group plc's Growth Numbers

Over the past three years, Dunelm Group plc has seen its earnings per share (EPS) grow by 5.4% per year. It achieved revenue growth of 4.1% over the last year.

We'd prefer higher revenue growth, but we're happy with the modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. 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 Dunelm Group plc Been A Good Investment?

Since shareholders would have lost about 2.9% over three years, some Dunelm Group plc investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

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 1 warning sign for Dunelm Group that you should be aware of before investing.

Switching gears from Dunelm Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.