Key Insights

Elders' Annual General Meeting to take place on 13th of December Salary of AU$1.24m is part of CEO Mark Allison's total remuneration The total compensation is 52% higher than the average for the industry Elders' EPS declined by 6.9% over the past three years  while total shareholder loss over the past three years was 16%

Shareholders will probably not be too impressed with the underwhelming results at Elders Limited (ASX:ELD) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 13th of December. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

Check out our latest analysis for Elders

How Does Total Compensation For Mark Allison Compare With Other Companies In The Industry?

At the time of writing, our data shows that Elders Limited has a market capitalization of AU$1.2b, and reported total annual CEO compensation of AU$2.3m for the year to September 2023. That's mostly flat as compared to the prior year's compensation. In particular, the salary of AU$1.24m, makes up a fairly large portion of the total compensation being paid to the CEO.

On comparing similar companies from the Australian Food industry with market caps ranging from AU$609m to AU$2.4b, we found that the median CEO total compensation was AU$1.5m. Accordingly, our analysis reveals that Elders Limited pays Mark Allison north of the industry median. Moreover, Mark Allison also holds AU$9.1m worth of Elders 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$1.2m AU$1.1m 54% Other AU$1.1m AU$1.2m 46% Total Compensation AU$2.3m AU$2.3m 100%

On an industry level, roughly 67% of total compensation represents salary and 33% is other remuneration. Elders pays a modest slice of remuneration through salary, as compared to the broader industry. 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.

 ceo-compensation

A Look at Elders Limited's Growth Numbers

Elders Limited has reduced its earnings per share by 6.9% a year over the last three years. In the last year, its revenue is down 3.6%.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Elders Limited Been A Good Investment?

Since shareholders would have lost about 16% over three years, some Elders Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for Elders that investors should be aware of in a dynamic business environment.

Switching gears from Elders, if you're hunting for a pristine balance sheet and premium returns, this freelist 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.