Suncorp Group Limited's (ASX:SUN) CEO Looks Due For A Compensation Raise
Key Insights
Suncorp Group will host its Annual General Meeting on 26th of September
Salary of AU$2.03m is part of CEO Steve Johnston's total remuneration
The overall pay is 62% below the industry average
Suncorp Group's total shareholder return over the past three years was 86% while its EPS grew by 22% over the past three years
The solid performance at Suncorp Group Limited (ASX:SUN) has been impressive and shareholders will probably be pleased to know that CEO Steve Johnston has delivered. This would be kept in mind at the upcoming AGM on 26th of September which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.
See our latest analysis for Suncorp Group
Comparing Suncorp Group Limited's CEO Compensation With The Industry
Our data indicates that Suncorp Group Limited has a market capitalization of AU$18b, and total annual CEO compensation was reported as AU$3.9m for the year to June 2023. We note that's a decrease of 21% compared to last year. We note that the salary of AU$2.03m makes up a sizeable portion of the total compensation received by the CEO.
On comparing similar companies in the Australian Insurance industry with market capitalizations above AU$12b, we found that the median total CEO compensation was AU$10m. That is to say, Steve Johnston is paid under the industry median. Moreover, Steve Johnston also holds AU$5.1m worth of Suncorp Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$2.0m | AU$1.9m | 52% |
Other | AU$1.8m | AU$3.0m | 48% |
Total Compensation | AU$3.9m | AU$4.9m | 100% |
Talking in terms of the industry, salary represented approximately 52% of total compensation out of all the companies we analyzed, while other remuneration made up 48% of the pie. Our data reveals that Suncorp Group allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Suncorp Group Limited's Growth Numbers
Suncorp Group Limited has seen its earnings per share (EPS) increase by 22% a year over the past three years. Its revenue is up 22% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Suncorp Group Limited Been A Good Investment?
Most shareholders would probably be pleased with Suncorp Group Limited for providing a total return of 86% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. 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.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 2 warning signs for Suncorp Group you should be aware of, and 1 of them shouldn't be ignored.
Switching gears from Suncorp Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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.
