Yahoo Finance Why Paragon Banking Group PLC’s (LON:PAG) CEO Pay Matters To You
Want to participate in a short research study? Help shape the future of investing tools and receive a $20 prize!
Nigel Terrington has been the CEO of Paragon Banking Group PLC (LON:PAG) since 1995. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Paragon Banking Group
How Does Nigel Terrington’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Paragon Banking Group PLC has a market cap of UK£1.1b, and is paying total annual CEO compensation of UK£2.6m. (This figure is for the year to September 2018). Notably, that’s an increase of 13% over the year before. While we always look at total compensation first, we note that the salary component is less, at UK£489k. When we examined a selection of companies with market caps ranging from UK£766m to UK£2.5b, we found the median CEO compensation was UK£1.4m.
As you can see, Nigel Terrington is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Paragon Banking Group PLC is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Paragon Banking Group has changed from year to year.
Is Paragon Banking Group PLC Growing?
On average over the last three years, Paragon Banking Group PLC has grown earnings per share (EPS) by 13% each year (using a line of best fit). It achieved revenue growth of 18% over the last year.
This demonstrates that the company has been improving recently. A good result. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Paragon Banking Group PLC Been A Good Investment?
I think that the total shareholder return of 54%, over three years, would leave most Paragon Banking Group PLC shareholders smiling. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
In Summary…
We compared total CEO remuneration at Paragon Banking Group PLC with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. Shareholders may want to check for free if Paragon Banking Group insiders are buying or selling shares.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
