Here's Why It's Unlikely That Restaurant Brands Asia Limited's (NSE:RBA) CEO Will See A Pay Rise This Year

Key Insights

• Restaurant Brands Asia will host its Annual General Meeting on 19th of September
• Total pay for CEO Rajeev Varman includes ₹16.0m salary
• Total compensation is similar to the industry average
• Restaurant Brands Asia's three-year loss to shareholders was 35% while its EPS was down 6.6% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at Restaurant Brands Asia Limited (NSE:RBA) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 19th of September. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Restaurant Brands Asia

Comparing Restaurant Brands Asia Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Restaurant Brands Asia Limited has a market capitalization of ₹52b, and reported total annual CEO compensation of ₹40m for the year to March 2024. Notably, that's a decrease of 46% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹16m.

For comparison, other companies in the Indian Hospitality industry with market capitalizations ranging between ₹34b and ₹134b had a median total CEO compensation of ₹38m. From this we gather that Rajeev Varman is paid around the median for CEOs in the industry. What's more, Rajeev Varman holds ₹67m 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	₹16m	₹40m	40%
Other	₹24m	₹34m	60%
Total Compensation	₹40m	₹74m	100%

Speaking on an industry level, nearly 93% of total compensation represents salary, while the remainder of 7% is other remuneration. Restaurant Brands Asia pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Restaurant Brands Asia Limited's Growth Numbers

Restaurant Brands Asia Limited has reduced its earnings per share by 6.6% a year over the last three years. In the last year, its revenue is up 14%.

The decline in EPS is a bit concerning. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Restaurant Brands Asia Limited Been A Good Investment?

Few Restaurant Brands Asia Limited shareholders would feel satisfied with the return of -35% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a 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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Restaurant Brands Asia that you should be aware of before investing.

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.