Key Insights

• Universal's Annual General Meeting to take place on 6th of August

• Total pay for CEO George Freeman includes US$1.07m salary

• The total compensation is 261% higher than the average for the industry

• Universal's total shareholder return over the past three years was 23% while its EPS grew by 11% over the past three years

Performance at Universal Corporation (NYSE:UVV) has been reasonably good and CEO George Freeman has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 6th of August, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Universal

Comparing Universal Corporation's CEO Compensation With The Industry

According to our data, Universal Corporation has a market capitalization of US$1.3b, and paid its CEO total annual compensation worth US$5.3m over the year to March 2024. We note that's an increase of 9.2% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.1m.

On comparing similar companies from the the US Tobacco industry with market caps ranging from US$1.0b to US$3.2b, we found that the median CEO total compensation was US$1.5m. Hence, we can conclude that George Freeman is remunerated higher than the industry median. What's more, George Freeman holds US$11m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 67% of total compensation out of all the companies we analyzed, while other remuneration made up 33% of the pie. Universal pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Universal Corporation's Growth

Universal Corporation's earnings per share (EPS) grew 11% per year over the last three years. Its revenue is up 7.0% over the last year.

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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Universal Corporation Been A Good Investment?

Universal Corporation has served shareholders reasonably well, with a total return of 23% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 2 warning signs (and 1 which is concerning) in Universal we think you should know about.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.

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