Yahoo Finance What We Learned About Paragon Banking Group's (LON:PAG) CEO Pay
Nigel Terrington has been the CEO of Paragon Banking Group PLC (LON:PAG) since 1995, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Paragon Banking Group.
Check out our latest analysis for Paragon Banking Group
How Does Total Compensation For Nigel Terrington Compare With Other Companies In The Industry?
Our data indicates that Paragon Banking Group PLC has a market capitalization of UK£1.2b, and total annual CEO compensation was reported as UK£2.0m for the year to September 2020. That's a notable decrease of 33% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at UK£563k.
On comparing similar companies from the same industry with market caps ranging from UK£732m to UK£2.3b, we found that the median CEO total compensation was UK£1.6m. This suggests that Paragon Banking Group remunerates its CEO largely in line with the industry average. Furthermore, Nigel Terrington directly owns UK£3.9m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2020 | 2019 | Proportion (2020) |
Salary | UK£563k | UK£503k | 28% |
Other | UK£1.5m | UK£2.5m | 72% |
Total Compensation | UK£2.0m | UK£3.0m | 100% |
On an industry level, roughly 49% of total compensation represents salary and 51% is other remuneration. Paragon Banking Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Paragon Banking Group PLC's Growth Numbers
Paragon Banking Group PLC has reduced its earnings per share by 5.9% a year over the last three years. It saw its revenue drop 16% over the last year.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. 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 Paragon Banking Group PLC Been A Good Investment?
With a total shareholder return of 5.3% over three years, Paragon Banking Group PLC has done okay by shareholders. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
To Conclude...
As we touched on above, Paragon Banking Group PLC is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. According to our analysis, Paragon Banking Group is suffering from uninspiring EPS growth, and even though shareholder returns are stable, they are hardly impressive. This doesn't compare well with CEO compensation, which is close to the industry median. We wouldn't go as far as saying CEO compensation is inappropriate, but we don't think the executive is underpaid.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Paragon Banking Group that you should be aware of before investing.
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.
This article by Simply Wall St is general in nature. 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.
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