Here's Why It's Unlikely That Chorus Limited's (NZSE:CNU) CEO Will See A Pay Rise This Year

Key Insights

• Chorus to hold its Annual General Meeting on 8th of November
• Salary of NZ$1.34m is part of CEO JB Rousselot's total remuneration
• The overall pay is 38% above the industry average
• Chorus' three-year loss to shareholders was 3.4% while its EPS was down 21% over the past three years

Chorus Limited (NZSE:CNU) has not performed well recently and CEO JB Rousselot will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 8th of November. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Chorus

Comparing Chorus Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Chorus Limited has a market capitalization of NZ$3.1b, and reported total annual CEO compensation of NZ$3.0m for the year to June 2023. That's a notable increase of 24% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at NZ$1.3m.

On comparing similar companies from the New Zealand Telecom industry with market caps ranging from NZ$1.7b to NZ$5.5b, we found that the median CEO total compensation was NZ$2.2m. Hence, we can conclude that JB Rousselot is remunerated higher than the industry median. What's more, JB Rousselot holds NZ$298k worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	NZ$1.3m	NZ$1.3m	44%
Other	NZ$1.7m	NZ$1.1m	56%
Total Compensation	NZ$3.0m	NZ$2.4m	100%

On an industry level, around 45% of total compensation represents salary and 55% is other remuneration. There isn't a significant difference between Chorus and the broader market, in terms of salary allocation in the overall compensation package. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Chorus Limited's Growth

Over the last three years, Chorus Limited has shrunk its earnings per share by 21% per year. It achieved revenue growth of 1.6% over the last year.

The decline in EPS is a bit concerning. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Chorus Limited Been A Good Investment?

Given the total shareholder loss of 3.4% over three years, many shareholders in Chorus Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid 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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 4 warning signs for Chorus you should be aware of, and 2 of them don't sit too well with us.

Switching gears from Chorus, 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.