In 2005 George Weston was appointed CEO of Associated British Foods plc (LON:ABF). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does George Weston's Compensation Compare With Similar Sized Companies?
Our data indicates that Associated British Foods plc is worth UK£20b, and total annual CEO compensation is UK£3.8m. (This number is for the twelve months until September 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£1.1m. When we examined a group of companies with market caps over UK£6.2b, we found that their median CEO total compensation was UK£3.7m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
So George Weston is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at Associated British Foods has changed over time.
Is Associated British Foods plc Growing?
On average over the last three years, Associated British Foods plc has grown earnings per share (EPS) by 19% each year (using a line of best fit). It achieved revenue growth of 1.4% over the last year.
This demonstrates that the company has been improving recently. A good result. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Shareholders might be interested in this free visualization of analyst forecasts.
Has Associated British Foods plc Been A Good Investment?
With a three year total loss of 16%, Associated British Foods plc would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
Remuneration for George Weston is close enough to the median pay for a CEO of a large company .
We think that the EPS growth is very pleasing, but we find the returns over the last three years to be lacking. Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Associated British Foods.
If you want to buy a stock that is better than Associated British Foods, this free list of high return, low debt companies is a great place to look.
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