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Is Bunzl plc's (LON:BNZL) CEO Salary Justified?

Simply Wall St

Frank van Zanten has been the CEO of Bunzl plc (LON:BNZL) since 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Bunzl

How Does Frank van Zanten's Compensation Compare With Similar Sized Companies?

Our data indicates that Bunzl plc is worth UK£6.9b, and total annual CEO compensation was reported as UK£2.8m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at UK£836k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined companies with market caps from UK£3.1b to UK£9.3b, and discovered that the median CEO total compensation of that group was UK£2.8m.

So Frank van Zanten receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

The graphic below shows how CEO compensation at Bunzl has changed from year to year.

LSE:BNZL CEO Compensation, December 4th 2019

Is Bunzl plc Growing?

Over the last three years Bunzl plc has grown its earnings per share (EPS) by an average of 10% per year (using a line of best fit). Its revenue is up 5.2% over last year.

This demonstrates that the company has been improving recently. A good result. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.

Has Bunzl plc Been A Good Investment?

Bunzl plc has not done too badly by shareholders, with a total return of 8.1%, over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

Frank van Zanten is paid around the same as most CEOs of similar size companies.

Shareholder returns could be better but shareholders would be pleased with the positive EPS growth. So considering these factors, we think the CEO pay is probably quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Bunzl shares (free trial).

Important note: Bunzl may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.