Here's Why Shareholders Should Examine Glanbia plc's (ISE:GL9) CEO Compensation Package More Closely

Shareholders will probably not be too impressed with the underwhelming results at Glanbia plc (ISE:GL9) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 06 May 2021. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for Glanbia

How Does Total Compensation For Siobhan Talbot Compare With Other Companies In The Industry?

At the time of writing, our data shows that Glanbia plc has a market capitalization of €3.5b, and reported total annual CEO compensation of €2.3m for the year to January 2021. That's a notable increase of 66% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at €1.1m.

In comparison with other companies in the industry with market capitalizations ranging from €1.7b to €5.3b, the reported median CEO total compensation was €1.8m. So it looks like Glanbia compensates Siobhan Talbot in line with the median for the industry. Moreover, Siobhan Talbot also holds €3.9m worth of Glanbia stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	€1.1m	€1.1m	45%
Other	€1.3m	€344k	55%
Total Compensation	€2.3m	€1.4m	100%

On an industry level, roughly 67% of total compensation represents salary and 33% is other remuneration. In Glanbia's case, non-salary compensation represents a greater slice of total remuneration, 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.

Glanbia plc's Growth

Over the last three years, Glanbia plc has shrunk its earnings per share by 15% per year. It saw its revenue drop 1.3% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Glanbia plc Been A Good Investment?

With a three year total loss of 3.6% for the shareholders, Glanbia plc would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

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, the board will get the chance to explain the steps it plans to take to improve business performance.

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 2 warning signs for Glanbia that investors should think about before committing capital to this stock.

Important note: Glanbia 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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