Here’s what we think about the compensation of the CEO of International Personal Finance (LON:IPF)

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Gerard Ryan was the CEO of International Personal Finance plc (LON:IPF) since 2012, and this article will examine executive compensation in relation to overall company performance. This analysis will also seek to assess whether the CEO is being adequately compensated, given the recent growth in earnings and investor returns for International Personal Finance.

Check out our latest analysis for International Personal Finance

How does Gerard Ryan’s total compensation compare to other companies in the industry?

According to our data, International Personal Finance plc has a market capitalization of £137m and paid its CEO total annual compensation worth £1.3m in the year to December 2019. We note that this is an increase of 8.8% over last year. We think total compensation is more important, but our data shows the CEO salary is lower, at £530,000.

For comparison, other companies in the same industry with market capitalizations between £79m and £316m had a median total CEO compensation of £541,000. This suggests that Gerard Ryan is paid more than the industry median. Additionally, Gerard Ryan also owns £777,000 of International Personal Finance shares directly under his own name.

Making up

2019

2018

Percentage (2019)

Salary

UK£530k

UK£516k

42%

Other

UK£730k

UK£642k

58%

The total compensation

UK£1.3m

UK£1.2m

100%

Speaking at the industry level, nearly 56% of total compensation is salary, while the remaining 44% is other compensation. In the case of International Personal Finance, non-salary compensation represents a larger share of total compensation, compared to the sector as a whole. It is important to note that a trend in non-salary compensation suggests that total compensation is linked to company performance.

CEO-remuneration

CEO-remuneration

A look at International Personal Finance plc’s growth figures

Earnings per share for International Personal Finance plc are essentially the same as three years ago, although slightly lower. Its turnover is up 2.6% compared to last year.

The lack of earnings growth is certainly not impressive. And the modest year-over-year revenue growth is not very reassuring in the face of declining earnings per share. These factors suggest that the company’s performance would not really justify a high salary for the CEO. In the future you might want to check this free visual report on analyst forecasts for future business income..

Was International Personal Finance plc a good investment?

Given the total shareholder loss of 59% over three years, many International Personal Finance plc shareholders are probably rather dissatisfied, to say the least. Therefore, it could be upsetting for shareholders if the CEO was generously paid.

In summary…

As we noted earlier, International Personal Finance pays its CEO higher than the norm for similarly sized companies in the same industry. That doesn’t look good in the face of shareholder returns, which have been negative for the past three years. Worse still, we have been expecting positive earnings growth for three years. Overall, with such poor performance, shareholders would likely have questions if the company decided to raise the CEO.

CEO compensation is just one of many factors that must be considered when reviewing company performance. We have identified 2 warning signs for International Personal Finance (1 makes us a little uneasy!) that you should be aware of before investing here.

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

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

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