Yahoo Finance The CEO Of Woolworths Group Limited (ASX:WOW) Might See A Pay Rise On The Horizon
Shareholders will probably not be disappointed by the robust results at Woolworths Group Limited (ASX:WOW) recently and they will be keeping this in mind as they go into the AGM on 26 October 2022. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. Here is our take on why we think CEO compensation is fair and may even warrant a raise.
View our latest analysis for Woolworths Group
How Does Total Compensation For Brad Banducci Compare With Other Companies In The Industry?
According to our data, Woolworths Group Limited has a market capitalization of AU$40b, and paid its CEO total annual compensation worth AU$7.6m over the year to June 2022. We note that's a decrease of 9.8% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$2.6m.
For comparison, other companies in the industry with market capitalizations above AU$13b, reported a median total CEO compensation of AU$14m. Accordingly, Woolworths Group pays its CEO under the industry median. What's more, Brad Banducci holds AU$8.3m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2022 | 2021 | Proportion (2022) |
Salary | AU$2.6m | AU$2.6m | 35% |
Other | AU$4.9m | AU$5.7m | 65% |
Total Compensation | AU$7.6m | AU$8.4m | 100% |
On an industry level, around 35% of total compensation represents salary and 65% is other remuneration. Our data reveals that Woolworths Group allocates salary more or less in line with the wider market. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Woolworths Group Limited's Growth Numbers
Over the past three years, Woolworths Group Limited has seen its earnings per share (EPS) grow by 3.8% per year. It achieved revenue growth of 9.2% over the last year.
We would argue that the improvement in revenue is good, but isn't particularly impressive, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Woolworths Group Limited Been A Good Investment?
Woolworths Group Limited has generated a total shareholder return of 14% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
Overall, the company hasn't done too poorly performance-wise, but we would like to see some improvement. If it manages to keep up the current streak, CEO remuneration could well be one of shareholders' least concerns. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for Woolworths Group that investors should think about before committing capital to this stock.
Switching gears from Woolworths Group, 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.
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