Shareholders will be pleased by the robust performance of Broadridge Financial Solutions, Inc. (NYSE:BR) recently and this will be kept in mind in the upcoming AGM on 10 November 2022. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.
Comparing Broadridge Financial Solutions, Inc.'s CEO Compensation With The Industry
At the time of writing, our data shows that Broadridge Financial Solutions, Inc. has a market capitalization of US$16b, and reported total annual CEO compensation of US$10m for the year to June 2022. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$963k.
For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$17m. This suggests that Tim Gokey is paid below the industry median. Moreover, Tim Gokey also holds US$17m worth of Broadridge Financial Solutions stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Talking in terms of the industry, salary represented approximately 9% of total compensation out of all the companies we analyzed, while other remuneration made up 91% of the pie. Broadridge Financial Solutions is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Broadridge Financial Solutions, Inc.'s Growth
Over the past three years, Broadridge Financial Solutions, Inc. has seen its earnings per share (EPS) grow by 3.6% per year. In the last year, its revenue is up 12%.
We think the revenue growth is good. And the modest growth in EPS isn't bad, either. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Broadridge Financial Solutions, Inc. Been A Good Investment?
With a total shareholder return of 17% over three years, Broadridge Financial Solutions, Inc. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
While the company seems to be headed in the right direction performance-wise, there's always room for improvement. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for Broadridge Financial Solutions you should be aware of, and 1 of them is a bit unpleasant.
Important note: Broadridge Financial Solutions 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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