We Think Shareholders May Want To Consider A Review Of Allfunds Group plc's (AMS:ALLFG) CEO Compensation Package

Key Insights

• Allfunds Group to hold its Annual General Meeting on 7th of May
• CEO Juan Alcaraz Lopez's total compensation includes salary of €1.15m
• The overall pay is 102% above the industry average
• Over the past three years, Allfunds Group's EPS fell by 22% and over the past three years, the total loss to shareholders 55%

The results at Allfunds Group plc (AMS:ALLFG) have been quite disappointing recently and CEO Juan Alcaraz Lopez bears some responsibility for this. At the upcoming AGM on 7th of May, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Allfunds Group

Comparing Allfunds Group plc's CEO Compensation With The Industry

Our data indicates that Allfunds Group plc has a market capitalization of €3.7b, and total annual CEO compensation was reported as €3.2m for the year to December 2023. We note that's an increase of 29% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at €1.2m.

In comparison with other companies in the the Netherlands Capital Markets industry with market capitalizations ranging from €1.9b to €6.0b, the reported median CEO total compensation was €1.6m. This suggests that Juan Alcaraz Lopez is paid more than the median for the industry. What's more, Juan Alcaraz Lopez holds €438k worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	€1.2m	€1.1m	36%
Other	€2.1m	€1.4m	64%
Total Compensation	€3.2m	€2.5m	100%

Speaking on an industry level, nearly 71% of total compensation represents salary, while the remainder of 29% is other remuneration. Allfunds Group sets aside a smaller share of compensation for salary, in comparison to the overall 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 Allfunds Group plc's Growth Numbers

Over the last three years, Allfunds Group plc has shrunk its earnings per share by 22% per year. It achieved revenue growth of 4.2% over the last year.

Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Allfunds Group plc Been A Good Investment?

With a total shareholder return of -55% over three years, Allfunds Group plc shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. 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.

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. We did our research and spotted 1 warning sign for Allfunds Group that investors should look into moving forward.

Switching gears from Allfunds 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.