Shareholders May Be More Conservative With Australia and New Zealand Banking Group Limited's (ASX:ANZ) CEO Compensation For Now
Performance at Australia and New Zealand Banking Group Limited (ASX:ANZ) has been reasonably good and CEO Shayne Elliott has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 16 December 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still want to keep CEO compensation within reason.
See our latest analysis for Australia and New Zealand Banking Group
How Does Total Compensation For Shayne Elliott Compare With Other Companies In The Industry?
At the time of writing, our data shows that Australia and New Zealand Banking Group Limited has a market capitalization of AU$78b, and reported total annual CEO compensation of AU$5.5m for the year to September 2021. That's a fairly small increase of 4.7% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$2.5m.
On comparing similar companies in the industry with market capitalizations above AU$11b, we found that the median total CEO compensation was AU$3.2m. Accordingly, our analysis reveals that Australia and New Zealand Banking Group Limited pays Shayne Elliott north of the industry median. Furthermore, Shayne Elliott directly owns AU$8.0m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2021 | 2020 | Proportion (2021) |
Salary | AU$2.5m | AU$2.5m | 45% |
Other | AU$3.0m | AU$2.7m | 55% |
Total Compensation | AU$5.5m | AU$5.2m | 100% |
On an industry level, around 57% of total compensation represents salary and 43% is other remuneration. In Australia and New Zealand Banking Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Australia and New Zealand Banking Group Limited's Growth
Over the last three years, Australia and New Zealand Banking Group Limited has shrunk its earnings per share by 3.9% per year. It achieved revenue growth of 21% over the last year.
The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Australia and New Zealand Banking Group Limited Been A Good Investment?
Australia and New Zealand Banking Group Limited has served shareholders reasonably well, with a total return of 28% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
Although the company has performed relatively well, we still think there are some areas that could be improved. Until EPS growth picks back up, we think shareholders may find it hard to justify increasing CEO pay given that they are already paid above industry average.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Australia and New Zealand Banking Group that investors should think about before committing capital to this stock.
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.
