The compensation for the CEO of Amcor plc (ASX: AMC) seems acceptable to us and here is why

Performance at Amcor plc (ASX: AMC) has been reasonably good, and CEO Ron Delia has done a good job of steering the company in the right direction. The shareholders will take this into account when they vote on company resolutions such as management board remuneration at the upcoming Annual General Meeting on November 10, 2021. Here is our opinion on why we consider the Executive Board compensation to be appropriate.

Check out our latest analysis for Amcor. at

How does Ron Delia’s total compensation compare to other companies in the industry?

Our data shows that Amcor plc has a market capitalization of A $ 25 billion and the total annual CEO compensation for the year ended June 2021 was $ 11 million. We find that this is down 28% compared to last year. We think total compensation is more important, but our data shows that CEO salary is lower at $ 1.7 million.

For comparison, other companies in the industry with market capitalizations in excess of A $ 11 billion reported an average total CEO compensation of $ 10 million. So it looks like Amcor is compensating Ron Delia in line with the industry median. In addition, Ron Delia also holds A $ 24 million worth of Amcor shares directly under their own name, which shows us that they have a significant personal stake in the company.

component

2021

2020

Share (2021)

salary

$ 1.7 million

$ 1.6 million

fifteen%

miscellaneous

$ 9.3 million

$ 14 million

85%

Total compensation

$ 11 million

$ 15 million

100%

At the industry level, nearly 62% of total compensation is salary, while the remainder of 38% is other compensation. It is interesting to note that Amcor allocates a lower proportion of compensation to salary compared to the broader industry. It is important to note that a propensity for non-salary compensation suggests that total compensation is tied to company performance.

CEO compensation

A look at Amcor plc’s growth numbers

Amcor plc’s earnings per share (EPS) increased 9.8% per year for the past three years. Last year it achieved a sales growth of 6.1%.

We’d prefer higher sales growth, but it’s good to see modest EPS growth. It is clear that the performance was quite decent, but based on this information, it is not overwhelming. If you’re looking ahead, you might want to have this free visual report on top Analyst Forecasts for the future profit of the company ..

Was Amcor plc a good investment?

Most shareholders would likely look forward to a total return of 38% over three years from Amcor plc. That strong performance could mean some shareholders don’t mind if the CEO is paid more than is common for a company of this size.

In summary …

Given the company’s decent performance, few, if any, shareholders should have questions about Executive Board compensation at the upcoming Annual General Meeting. With that in mind, any proposed CEO compensation increase will continue to be judged on how appropriate it is based on performance and industry benchmarks.

While it’s important to look out for CEO compensation, investors should also consider other elements of the business. We researched and discovered 2 warning signs for Amcor that investors should look to the future.

Switch from Amcor if you’re looking for a pristine balance sheet and great returns, this is for free The list of high yield, low debt companies is a great place to look.

This article from Simply Wall St is of a general nature. We only provide comments based on historical data and analyst projections using an unbiased methodology, and our articles are not intended as financial advice. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. Our goal is to provide you with long-term, focused analysis based on fundamentals. Note that our analysis may not take into account the latest company announcements or quality material, which may be sensitive to the price. Simply Wall St has no position in the stocks mentioned.

Do you have any feedback on this article? Concerned about the content? Get in touch directly with us. Alternatively, send an email to the editorial team (at) simplywallst.com.

About Nina Snider

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