Yahoo Finance Here's Why It's Unlikely That KeyCorp's (NYSE:KEY) CEO Will See A Pay Rise This Year
Key Insights
KeyCorp's Annual General Meeting to take place on 9th of May
Total pay for CEO Chris Gorman includes US$1.20m salary
The overall pay is comparable to the industry average
Over the past three years, KeyCorp's EPS fell by 24% and over the past three years, the total loss to shareholders 25%
KeyCorp (NYSE:KEY) has not performed well recently and CEO Chris Gorman will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 9th of May. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.
Check out our latest analysis for KeyCorp
How Does Total Compensation For Chris Gorman Compare With Other Companies In The Industry?
At the time of writing, our data shows that KeyCorp has a market capitalization of US$14b, and reported total annual CEO compensation of US$10m for the year to December 2023. This means that the compensation hasn't changed much from last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.2m.
On comparing similar companies in the American Banks industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$12m. This suggests that KeyCorp remunerates its CEO largely in line with the industry average. Furthermore, Chris Gorman directly owns US$17m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.2m | US$1.2m | 12% |
Other | US$9.1m | US$9.3m | 88% |
Total Compensation | US$10m | US$10m | 100% |
On an industry level, around 45% of total compensation represents salary and 55% is other remuneration. KeyCorp pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
KeyCorp's Growth
Over the last three years, KeyCorp has shrunk its earnings per share by 24% per year. In the last year, its revenue is down 14%.
Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has KeyCorp Been A Good Investment?
Given the total shareholder loss of 25% over three years, many shareholders in KeyCorp are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for KeyCorp that investors should think about before committing capital to this stock.
Switching gears from KeyCorp, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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.
