Here's Why Shareholders Should Examine Delegat Group Limited's (NZSE:DGL) CEO Compensation Package More Closely

Key Insights

• Delegat Group's Annual General Meeting to take place on 27th of November
• Salary of NZ$769.0k is part of CEO Steven Carden's total remuneration
• The total compensation is 68% higher than the average for the industry
• Delegat Group's EPS declined by 20% over the past three years while total shareholder loss over the past three years was 64%

Shareholders will probably not be too impressed with the underwhelming results at Delegat Group Limited (NZSE:DGL) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 27th of November. 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 Delegat Group

How Does Total Compensation For Steven Carden Compare With Other Companies In The Industry?

According to our data, Delegat Group Limited has a market capitalization of NZ$478m, and paid its CEO total annual compensation worth NZ$1.0m over the year to June 2024. We note that's an increase of 17% above last year. Notably, the salary which is NZ$769.0k, represents most of the total compensation being paid.

On comparing similar companies from the New Zealand Beverage industry with market caps ranging from NZ$170m to NZ$680m, we found that the median CEO total compensation was NZ$601k. This suggests that Steven Carden is paid more than the median for the industry.

Component	2024	2023	Proportion (2024)
Salary	NZ$769k	NZ$738k	76%
Other	NZ$243k	NZ$126k	24%
Total Compensation	NZ$1.0m	NZ$864k	100%

On an industry level, roughly 68% of total compensation represents salary and 32% is other remuneration. Delegat Group pays out 76% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Delegat Group Limited's Growth

Over the last three years, Delegat Group Limited has shrunk its earnings per share by 20% per year. The trailing twelve months of revenue was pretty much the same as the prior period.

Overall this is not a very positive result for shareholders. And the flat revenue is seriously uninspiring. 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 Delegat Group Limited Been A Good Investment?

With a total shareholder return of -64% over three years, Delegat Group Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 3 warning signs for Delegat Group (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

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.