Associated British Foods plc's (LON:ABF) CEO Compensation Looks Acceptable To Us And Here's Why
Key Insights
Associated British Foods' Annual General Meeting to take place on 8th of December
CEO George Weston's total compensation includes salary of UK£1.12m
Total compensation is similar to the industry average
Associated British Foods' total shareholder return over the past three years was 9.1% while its EPS grew by 34% over the past three years
CEO George Weston has done a decent job of delivering relatively good performance at Associated British Foods plc (LON:ABF) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 8th of December. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.
See our latest analysis for Associated British Foods
How Does Total Compensation For George Weston Compare With Other Companies In The Industry?
Our data indicates that Associated British Foods plc has a market capitalization of UK£18b, and total annual CEO compensation was reported as UK£4.1m for the year to September 2023. We note that's an increase of 79% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at UK£1.1m.
In comparison with other companies in the British Food industry with market capitalizations over UK£6.3b, the reported median total CEO compensation was UK£4.1m. This suggests that Associated British Foods remunerates its CEO largely in line with the industry average. Moreover, George Weston also holds UK£91m worth of Associated British Foods stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | UK£1.1m | UK£1.1m | 27% |
Other | UK£3.0m | UK£1.2m | 73% |
Total Compensation | UK£4.1m | UK£2.3m | 100% |
On an industry level, around 49% of total compensation represents salary and 51% is other remuneration. Associated British Foods pays a modest slice of remuneration through salary, as compared 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.
Associated British Foods plc's Growth
Associated British Foods plc has seen its earnings per share (EPS) increase by 34% a year over the past three years. Its revenue is up 16% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 Associated British Foods plc Been A Good Investment?
Associated British Foods plc has generated a total shareholder return of 9.1% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.
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. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.
If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Associated British Foods.
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.
