Yahoo Finance We Think Shareholders Will Probably Be Generous With Imperial Brands PLC's (LON:IMB) CEO Compensation
It would be hard to discount the role that CEO Stefan Bomhard has played in delivering the impressive results at Imperial Brands PLC (LON:IMB) recently. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 01 February 2023. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is not extravagant.
See our latest analysis for Imperial Brands
How Does Total Compensation For Stefan Bomhard Compare With Other Companies In The Industry?
At the time of writing, our data shows that Imperial Brands PLC has a market capitalization of UK£19b, and reported total annual CEO compensation of UK£5.7m for the year to September 2022. We note that's an increase of 65% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at UK£1.3m.
For comparison, other companies in the the United Kingdom Tobacco industry with market capitalizations above UK£6.5b, reported a median total CEO compensation of UK£4.8m. This suggests that Imperial Brands remunerates its CEO largely in line with the industry average. What's more, Stefan Bomhard holds UK£1.1m worth of shares in the company in their own name.
Component | 2022 | 2021 | Proportion (2022) |
Salary | UK£1.3m | UK£1.3m | 23% |
Other | UK£4.4m | UK£2.2m | 77% |
Total Compensation | UK£5.7m | UK£3.5m | 100% |
Talking in terms of the industry, salary represented approximately 35% of total compensation out of all the companies we analyzed, while other remuneration made up 65% of the pie. It's interesting to note that Imperial Brands allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Imperial Brands PLC's Growth Numbers
Imperial Brands PLC has seen its earnings per share (EPS) increase by 17% a year over the past three years. In the last year, its revenue is up 2.1%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Imperial Brands PLC Been A Good Investment?
We think that the total shareholder return of 38%, over three years, would leave most Imperial Brands PLC shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 3 warning signs for Imperial Brands that investors should be aware of in a dynamic business environment.
Switching gears from Imperial Brands, 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.
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