This is why the CEO of Brown-Forman Corporation (NYSE: BF.B) can expect his salary increase



Shareholders are unlikely to be disappointed with the good results of Brown-Forman Company (NYSE: BF.B) recently and they’ll keep that in mind when they go to the AGM on July 22, 2021. The focus will likely be on future strategic initiatives that the board and management will put in place to improve the business. rather than the compensation of executives when they vote on company resolutions. Here’s our take on why we think CEO pay is fair and may even justify a raise.

Check out our latest analysis for Brown-Forman

How does Lawson Whiting’s total compensation compare to that of other companies in the industry?

According to our data, Brown-Forman Corporation has a market capitalization of US $ 34 billion and paid its CEO a total annual compensation of US $ 9.1 million in the year until April 2021. We note that is an increase of 47% compared to last year. We think total compensation is more important, but our data shows the CEO salary is less, at $ 1.2 million.

Comparing similar companies in the industry with market capitalizations greater than US $ 8.0 billion, we found that the median total CEO compensation was US $ 14 million. As a result, Brown-Forman pays its CEO based on the industry median. In addition, Lawson Whiting also owns shares of Brown-Forman worth US $ 2.0 million directly under their own name.

Component 2021 2020 Proportion (2021)
Salary US $ 1.2 million US $ 1.1 million 13%
Other US $ 7.9 million US $ 5.1 million 87%
Total compensation US $ 9.1 million US $ 6.2 million 100%

At the industry level, approximately 21% of total compensation is salary and 79% is other compensation. Brown-Forman pays a modest bracket of pay through salary, compared to the industry as a whole. It is important to note that an inclination towards non-salary compensation suggests that total compensation is linked to the performance of the company.

NYSE CEO Compensation: BF.B July 16, 2021

Growth of Brown-Forman Corporation

Brown-Forman Corporation has seen its earnings per share (EPS) increase by 8.1% per year over the past three years. Last year, its turnover increased by 2.9%.

We’re not particularly impressed with the revenue growth, but we’re happy with the modest EPS growth. Considering these factors, we would say the performance was pretty decent, but not surprising. Stepping away from the current shape for a second, it might be important to check out this free visual representation of what analysts expect for the future.

Has Brown-Forman been a good investment?

With a total shareholder return of 44% over three years, Brown-Forman Corporation has performed well with shareholders. This strong performance could mean that some shareholders would not object to the CEO being paid more than is normal for a company of its size.

In summary…

Although the company appears to be heading in the right direction in terms of performance, there is always room for improvement. Assuming the company continues to grow at a good pace, few shareholders would object to CEO pay. Instead, investors might be more interested in discussions that would help manage their long-term growth expectations, such as the company’s business strategies and potential for future growth.

While paying attention to CEO compensation is important, investors should consider other parts of the business as well. We did our research and spotted 1 warning sign for Brown-Forman that investors should consider moving forward.

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This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
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