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Shareholders May Not Be So Generous With Paragon Banking Group PLC's (LON:PAG) CEO Compensation And Here's Why

Key Insights

  • Paragon Banking Group to hold its Annual General Meeting on 1st of March

  • Salary of UK£629.0k is part of CEO Nigel Terrington's total remuneration

  • Total compensation is 48% above industry average

  • Over the past three years, Paragon Banking Group's EPS grew by 42% and over the past three years, the total shareholder return was 36%

Under the guidance of CEO Nigel Terrington, Paragon Banking Group PLC (LON:PAG) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 1st of March. However, some shareholders may still want to keep CEO compensation within reason.

View our latest analysis for Paragon Banking Group

How Does Total Compensation For Nigel Terrington Compare With Other Companies In The Industry?

At the time of writing, our data shows that Paragon Banking Group PLC has a market capitalization of UK£1.3b, and reported total annual CEO compensation of UK£3.5m for the year to September 2022. Notably, that's an increase of 15% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at UK£629k.

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For comparison, other companies in the the United Kingdom Mortgage industry with market capitalizations ranging between UK£829m and UK£2.7b had a median total CEO compensation of UK£2.3m. Accordingly, our analysis reveals that Paragon Banking Group PLC pays Nigel Terrington north of the industry median. Moreover, Nigel Terrington also holds UK£7.4m worth of Paragon Banking Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2022

2021

Proportion (2022)

Salary

UK£629k

UK£599k

18%

Other

UK£2.8m

UK£2.4m

82%

Total Compensation

UK£3.5m

UK£3.0m

100%

On an industry level, around 41% of total compensation represents salary and 59% is other remuneration. In Paragon Banking Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison 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.

ceo-compensation
ceo-compensation

Paragon Banking Group PLC's Growth

Paragon Banking Group PLC's earnings per share (EPS) grew 42% per year over the last three years. Its revenue is up 15% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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?

We think that the total shareholder return of 36%, over three years, would leave most Paragon Banking Group PLC shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is 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 identified 2 warning signs for Paragon Banking Group (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Important note: Paragon Banking Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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

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.

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