Item 4: Re-elect the CEO
The CEO serves on the Nomination Committee, which does not meet ECGS guidelines. We recommend shareholders oppose.
Item 12: Approve the remuneration report
The structure of remuneration is unsatisfactory given the size of the bonus, the use of accelerated vesting and an excessive benefits policy. Incentive pay as a percentage of base salary also exceeds guidelines. This is partially mitigated by the base salary, which is at the median, and actual incentive pay was not excessive. However, the CEO's salary was increased by 25% to the median in 2017 and the maximum bonus was increased in both 2017 and 2018, which could be an upward pay ratchet arising due only to peer comparisons. At the same time, incentive pay is still overly reliant on a single performance metric and this metric is EPS. It is not considered appropriate for remuneration to depend so heavily on EPS, especially as it can potentially be manipulated by executives.Such an upward increase in pay does not appear justified especially without adequate alignment of pay with performance in the incentive plans and a more reasonable benefits policy. We recommend shareholders oppose.
Bunzl is engaged in the distribution and outsourcing service, supplying a range of internationally sourced non-food products to a variety of market sectors. Co.'s market sectors: Foodservice, which comprised of non-food consumables, including food packaging, disposable tableware and guest amenities, cleaning products and safety items; Grocery, which goods not for resale including food packaging and hygiene supplies, to grocery stores; Cleaning and hygiene, which including chemicals and hygiene paper; safety, which include a range of personal protection equipment, including hard hats, gloves, boots, ear and eye protection and other workwear, to industrial and construction markets.
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Narrow-moat Bunzl delivered a relatively downbeat first-quarter trading update. Organic revenue growth was just 1.5% over the period, a sharp drop from the 4.3% delivered in full-years 2017 and 2018. While this figure is well below our expectation of 3.4% growth in full-year 2019, we are hesitant to hastily cut our numbers so early in the year. We therefore maintain our near-term forecasts and GBX 2,360 fair value estimate. Despite today’s fall, we believe the shares are currently fairly valued. The cause of the sharp decline in growth in first-quarter was North America. Generating almost 60%...
Narrow-moat Bunzl delivered a relatively downbeat 1Q trading update. Organic revenue growth was just 1.5% over the period, a sharp drop from the 4.3% delivered in full-years 2017 and 2018. While this figure is well below our expectation of 3.4% growth in full-year 2019, we are hesitant to hastily cut our numbers so early in the year. We therefore maintain our near-term forecasts and GBX 2,360 fair value estimate. Despite today’s fall, we believe the shares are currently fairly valued. The cause...
Bunzl is the only global player in the nonfood consumables space, operating in more than 30 countries. The company sources, stores, and distributes thousands of products to its diverse customer base, essentially offering a one-stop shop for operating supplies. While Bunzl holds significant share, estimated to be close to 50% of the outsourced U.S. market, outside of Bunzl the market is extremely fragmented, with thousands of mom-and-pop or regional outfits meeting the needs of much of the industry. The company has successfully expanded through an almost even combination of organic and acquisit...
Item 3: Approve the Remuneration ReportThe remuneration structure is satisfactory, though accelerated vesting is possible. Potential and actual total variable remuneration exceed guidelines, but not very much. They are moderate in comparison with UK market practice. Overall, the quantum during the year was not excessive. We recommend shareholders vote in favor.
Item 3: Approve the Remuneration Report The structure is weighted more heavily towards short-term performance. One of the performance metrics for the LTI is the payment of sustainable dividends, which is not considered appropriate as executives can potentially influence the payout level. The LTI also includes relative TSR as a performance metric. Nevertheless, the quantum is not excessive and even maximum potential amounts are moderate. On balance, we recommend shareholders vote in favor. Item 4: Approve the Remuneration PolicyThe main concern with the Company's remuneration policy is that pa...
Item 2: Approve the Remuneration ReportThe remuneration structure is unsatisfactory. The main concern at the Company is that the potential maximum incentive pay including the bonus, matching shares on the deferred portion of the bonus and the LTI amounts to 1000% of base salary, which is considered grossly excessive. Actual incentive pay during the year was1.6 times the ECGS limit. Furthermore, variable remuneration is overly reliant on a single performance metric, benchmark profit before tax. A second performance criteria will be used in the coming year. We note that the Company has adjusted ...
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