We Think The Compensation For Allied Farmers Limited's (NZSE:ALF) CEO Looks About Right

Key Insights

• Allied Farmers will host its Annual General Meeting on 6th of November
• Total pay for CEO Richard Milsom includes NZ$375.0k salary
• Total compensation is 46% below industry average
• Over the past three years, Allied Farmers' EPS fell by 0.06% and over the past three years, the total shareholder return was 6.0%

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

Performance at Allied Farmers Limited (NZSE:ALF) has been rather uninspiring recently and shareholders may be wondering how CEO Richard Milsom plans to fix this. At the next AGM coming up on 6th of November, they can influence managerial decision making through voting on resolutions, including executive remuneration. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We think CEO compensation looks appropriate given the data we have put together.

View our latest analysis for Allied Farmers

How Does Total Compensation For Richard Milsom Compare With Other Companies In The Industry?

According to our data, Allied Farmers Limited has a market capitalization of NZ$23m, and paid its CEO total annual compensation worth NZ$656k over the year to June 2025. We note that's an increase of 31% above last year. We note that the salary of NZ$375.0k makes up a sizeable portion of the total compensation received by the CEO.

For comparison, other companies in the New Zealander Food industry with market capitalizations below NZ$348m, reported a median total CEO compensation of NZ$1.2m. This suggests that Richard Milsom is paid below the industry median. What's more, Richard Milsom holds NZ$407k worth of shares in the company in their own name.

On an industry level, around 46% of total compensation represents salary and 54% is other remuneration. Allied Farmers is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Allied Farmers Limited's Growth

Over the last three years, Allied Farmers Limited has not seen its earnings per share change much, though they have deteriorated slightly. In the last year, its revenue is up 11%.

A lack of EPS improvement is not good to see. 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. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Allied Farmers Limited Been A Good Investment?

Allied Farmers Limited has generated a total shareholder return of 6.0% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

In Summary...

While it's true that shareholders have seen decent returns, it's hard to overlook the lack of earnings growth and this makes us wonder if the current returns can continue. Shareholders might want to question the board about these concerns, and revisit their investment thesis for the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 3 warning signs for Allied Farmers that you should be aware of before investing.

Switching gears from Allied Farmers, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.