Kerry Group plc's (ISE:KRZ) CEO Will Probably Find It Hard To See A Huge Raise This Year

Key Insights

• Kerry Group to hold its Annual General Meeting on 2nd of May
• CEO Edmond Scanlon's total compensation includes salary of €1.28m
• The total compensation is similar to the average for the industry
• Over the past three years, Kerry Group's EPS grew by 10% and over the past three years, the total loss to shareholders 25%

Shareholders of Kerry Group plc (ISE:KRZ) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 2nd of May could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Kerry Group

How Does Total Compensation For Edmond Scanlon Compare With Other Companies In The Industry?

According to our data, Kerry Group plc has a market capitalization of €14b, and paid its CEO total annual compensation worth €4.6m over the year to December 2023. We note that's an increase of 18% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at €1.3m.

For comparison, other companies in the Ireland Food industry with market capitalizations above €7.5b, reported a median total CEO compensation of €4.6m. From this we gather that Edmond Scanlon is paid around the median for CEOs in the industry. What's more, Edmond Scanlon holds €7.6m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	€1.3m	€1.2m	28%
Other	€3.3m	€2.7m	72%
Total Compensation	€4.6m	€3.9m	100%

Speaking on an industry level, nearly 55% of total compensation represents salary, while the remainder of 45% is other remuneration. Kerry Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Kerry Group plc's Growth Numbers

Kerry Group plc's earnings per share (EPS) grew 10% per year over the last three years. In the last year, its revenue is down 8.6%.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Kerry Group plc Been A Good Investment?

With a three year total loss of 25% for the shareholders, Kerry Group plc would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

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. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

So you may want to check if insiders are buying Kerry Group shares with their own money (free access).

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.