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How Should Investors React To A.G. BARR p.l.c.'s (LON:BAG) CEO Pay?

Roger White became the CEO of A.G. BARR p.l.c. (LON:BAG) in 2004. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for A.G. BARR

How Does Roger White's Compensation Compare With Similar Sized Companies?

Our data indicates that A.G. BARR p.l.c. is worth UK£546m, and total annual CEO compensation was reported as UK£739k for the year to January 2020. That's below the compensation, last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at UK£471k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of UK£321m to UK£1.3b. The median total CEO compensation was UK£975k.

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Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Speaking on an industry level, we can see that nearly 22% of total compensation represents salary, while the remainder of 78% is other remuneration. A.G. BARR pays out 64% of aggregate payment in the shape of a salary, which is significantly higher than the industry average.

So Roger White is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance. You can see, below, how CEO compensation at A.G. BARR has changed over time.

LSE:BAG CEO Compensation May 6th 2020
LSE:BAG CEO Compensation May 6th 2020

Is A.G. BARR p.l.c. Growing?

On average over the last three years, A.G. BARR p.l.c. has shrunk earnings per share by 3.8% each year (measured with a line of best fit). It saw its revenue drop 8.3% over the last year.

Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.

Has A.G. BARR p.l.c. Been A Good Investment?

With a three year total loss of 20%, A.G. BARR p.l.c. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Roger White is paid around what is normal for the leaders of comparable size companies.

Returns have been disappointing and the company is not growing its earnings per share. Suffice it to say, we don't think the CEO is underpaid! Looking into other areas, we've picked out 1 warning sign for A.G. BARR that investors should think about before committing capital to this stock.

Important note: A.G. BARR may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.