Increases to CEO Compensation Might Be Put On Hold For Now at Universal Corporation (NYSE:UVV)

Key Insights

• Universal's Annual General Meeting to take place on 6th of August
• Salary of US$1.07m is part of CEO George Freeman's total remuneration
• The total compensation is 261% higher than the average for the industry
• Over the past three years, Universal's EPS grew by 11% and over the past three years, the total shareholder return was 23%

CEO George Freeman has done a decent job of delivering relatively good performance at Universal Corporation (NYSE:UVV) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 6th of August. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Universal

How Does Total Compensation For George Freeman Compare With Other Companies In The Industry?

According to our data, Universal Corporation has a market capitalization of US$1.3b, and paid its CEO total annual compensation worth US$5.3m over the year to March 2024. Notably, that's an increase of 9.2% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.

In comparison with other companies in the the US Tobacco industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$1.5m. Accordingly, our analysis reveals that Universal Corporation pays George Freeman north of the industry median. Moreover, George Freeman also holds US$11m worth of Universal stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	US$1.1m	US$1.0m	20%
Other	US$4.2m	US$3.8m	80%
Total Compensation	US$5.3m	US$4.8m	100%

On an industry level, around 67% of total compensation represents salary and 33% is other remuneration. It's interesting to note that Universal allocates a smaller portion of compensation to salary in comparison to the broader 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 Universal Corporation's Growth Numbers

Universal Corporation has seen its earnings per share (EPS) increase by 11% a year over the past three years. Its revenue is up 7.0% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Universal Corporation Been A Good Investment?

Universal Corporation has served shareholders reasonably well, with a total return of 23% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which is a bit concerning) in Universal we think you should know about.

Switching gears from Universal, 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.

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