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How Much is Australia and New Zealand Banking Group's (ASX:ANZ) CEO Getting Paid?

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·4-min read
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Shayne Elliott has been the CEO of Australia and New Zealand Banking Group Limited (ASX:ANZ) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Australia and New Zealand Banking Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Australia and New Zealand Banking Group

Comparing Australia and New Zealand Banking Group Limited's CEO Compensation With the industry

Our data indicates that Australia and New Zealand Banking Group Limited has a market capitalization of AU$75b, and total annual CEO compensation was reported as AU$5.2m for the year to September 2020. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$2.5m.

On comparing similar companies in the industry with market capitalizations above AU$10b, we found that the median total CEO compensation was AU$4.0m. From this we gather that Shayne Elliott is paid around the median for CEOs in the industry. Moreover, Shayne Elliott also holds AU$9.6m worth of Australia and New Zealand Banking Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2020

2019

Proportion (2020)

Salary

AU$2.5m

AU$2.1m

47%

Other

AU$2.7m

AU$3.1m

53%

Total Compensation

AU$5.2m

AU$5.2m

100%

Talking in terms of the industry, salary represented approximately 65% of total compensation out of all the companies we analyzed, while other remuneration made up 35% of the pie. It's interesting to note that Australia and New Zealand Banking Group allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

A Look at Australia and New Zealand Banking Group Limited's Growth Numbers

Australia and New Zealand Banking Group Limited has reduced its earnings per share by 16% a year over the last three years. In the last year, its revenue is down 17%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. 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 Australia and New Zealand Banking Group Limited Been A Good Investment?

Australia and New Zealand Banking Group Limited has not done too badly by shareholders, with a total return of 8.8%, over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

As previously discussed, Shayne is compensated close to the median for companies of its size, and which belong to the same industry. Australia and New Zealand Banking Group has had a tough time in recent years, with declining EPS growth, and although shareholder returns are stable, they are hardly worth celebrating. This doesn't compare well with CEO compensation, which is largely in line with the industry median. We wouldn't go as far as saying CEO compensation is inappropriate, but we don't think the executive is underpaid.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Australia and New Zealand Banking Group that investors should look into moving forward.

Important note: Australia and New Zealand Banking Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

This article by Simply Wall St is general in nature. 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 (at) simplywallst.com.

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