We Think Foley Wines Limited's (NZSE:FWL) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• Foley Wines to hold its Annual General Meeting on 15th of November
• Salary of NZ$625.0k is part of CEO Antony Turnbull's total remuneration
• The overall pay is 55% above the industry average
• Foley Wines' three-year loss to shareholders was 29% while its EPS was down 2.9% over the past three years

The results at Foley Wines Limited (NZSE:FWL) have been quite disappointing recently and CEO Antony Turnbull bears some responsibility for this. At the upcoming AGM on 15th of November, shareholders can hear from the board including their plans for turning around performance. 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.

Check out our latest analysis for Foley Wines

Comparing Foley Wines Limited's CEO Compensation With The Industry

Our data indicates that Foley Wines Limited has a market capitalization of NZ$82m, and total annual CEO compensation was reported as NZ$1.1m for the year to June 2023. Notably, that's an increase of 11% over the year before. Notably, the salary which is NZ$625.0k, represents a considerable chunk of the total compensation being paid.

For comparison, other companies in the New Zealand Beverage industry with market capitalizations below NZ$336m, reported a median total CEO compensation of NZ$681k. Accordingly, our analysis reveals that Foley Wines Limited pays Antony Turnbull north of the industry median.

Component	2023	2022	Proportion (2023)
Salary	NZ$625k	NZ$550k	59%
Other	NZ$430k	NZ$400k	41%
Total Compensation	NZ$1.1m	NZ$950k	100%

On an industry level, roughly 59% of total compensation represents salary and 41% is other remuneration. Our data reveals that Foley Wines allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Foley Wines Limited's Growth

Over the last three years, Foley Wines Limited has shrunk its earnings per share by 2.9% per year. Its revenue is up 15% over the last year.

The lack of EPS growth is certainly uninspiring. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Foley Wines Limited Been A Good Investment?

Given the total shareholder loss of 29% over three years, many shareholders in Foley Wines Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Foley Wines you should be aware of, and 1 of them is a bit concerning.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.