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Increases to CEO Compensation Might Be Put On Hold For Now at Commonwealth Bank of Australia (ASX:CBA)

Key Insights

  • Commonwealth Bank of Australia's Annual General Meeting to take place on 10th of October

  • CEO Matt Comyn's total compensation includes salary of AU$2.47m

  • The overall pay is 172% above the industry average

  • Over the past three years, Commonwealth Bank of Australia's EPS grew by 13% and over the past three years, the total shareholder return was 70%

Under the guidance of CEO Matt Comyn, Commonwealth Bank of Australia (ASX:CBA) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 10th of October. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Commonwealth Bank of Australia

Comparing Commonwealth Bank of Australia's CEO Compensation With The Industry

According to our data, Commonwealth Bank of Australia has a market capitalization of AU$167b, and paid its CEO total annual compensation worth AU$7.3m over the year to June 2023. That's a modest increase of 5.2% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$2.5m.

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For comparison, other companies in the Australian Banks industry with market capitalizations above AU$13b, reported a median total CEO compensation of AU$2.7m. Hence, we can conclude that Matt Comyn is remunerated higher than the industry median. Moreover, Matt Comyn also holds AU$11m worth of Commonwealth Bank of Australia 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$2.5m

AU$2.5m

34%

Other

AU$4.9m

AU$4.5m

66%

Total Compensation

AU$7.3m

AU$7.0m

100%

On an industry level, around 62% of total compensation represents salary and 38% is other remuneration. Commonwealth Bank of Australia sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

Commonwealth Bank of Australia's Growth

Commonwealth Bank of Australia's earnings per share (EPS) grew 13% per year over the last three years. In the last year, its revenue is up 4.8%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Commonwealth Bank of Australia Been A Good Investment?

Boasting a total shareholder return of 70% over three years, Commonwealth Bank of Australia has done well by shareholders. 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.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 1 warning sign for Commonwealth Bank of Australia that investors should be aware of in a dynamic business environment.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.