What We Learned About Bega Cheese's (ASX:BGA) CEO Pay
This article will reflect on the compensation paid to Paul van Heerwaarden who has served as CEO of Bega Cheese Limited (ASX:BGA) since 2017. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Bega Cheese.
Check out our latest analysis for Bega Cheese
How Does Total Compensation For Paul van Heerwaarden Compare With Other Companies In The Industry?
According to our data, Bega Cheese Limited has a market capitalization of AU$1.2b, and paid its CEO total annual compensation worth AU$857k over the year to June 2020. That's a notable decrease of 11% on last year. In particular, the salary of AU$725.2k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar companies from the same industry with market caps ranging from AU$544m to AU$2.2b, we found that the median CEO total compensation was AU$1.3m. In other words, Bega Cheese pays its CEO lower than the industry median. Moreover, Paul van Heerwaarden also holds AU$264k worth of Bega Cheese stock directly under their own name.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$725k | AU$707k | 85% |
Other | AU$132k | AU$257k | 15% |
Total Compensation | AU$857k | AU$964k | 100% |
Talking in terms of the industry, salary represented approximately 80% of total compensation out of all the companies we analyzed, while other remuneration made up 20% of the pie. Bega Cheese is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Bega Cheese Limited's Growth Numbers
Bega Cheese Limited has reduced its earnings per share by 52% a year over the last three years. In the last year, its revenue is up 5.1%.
Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Bega Cheese Limited Been A Good Investment?
Given the total shareholder loss of 24% over three years, many shareholders in Bega Cheese Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
As previously discussed, Paul is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Over the last three years, shareholder returns have been downright disappointing, and EPSgrowth has been equally disappointing. It's tough to say that Paul is earning a very high compensation, but shareholders will likely want to see healthier investor returns before agreeing that a raise is in order.
If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Bega Cheese.
Important note: Bega Cheese 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.
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