How Is People’s United Financial’s (NASDAQ:PBCT) CEO Compensated?
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Jack Barnes has been the CEO of People’s United Financial, Inc. (NASDAQ:PBCT) since 2010, 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 People’s United Financial.
See our latest analysis for People’s United Financial
Comparing People’s United Financial, Inc.’s CEO Compensation With the industry
According to our data, People’s United Financial, Inc. has a market capitalization of US$4.8b, and paid its CEO total annual compensation worth US$5.8m over the year to December 2019. This means that the compensation hasn’t changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.1m.
In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$4.7m. So it looks like People’s United Financial compensates Jack Barnes in line with the median for the industry. Furthermore, Jack Barnes directly owns US$7.2m worth of shares in the company, implying that they are deeply invested in the company’s success.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | US$1.1m | US$1.1m | 19% |
| Other | US$4.7m | US$4.6m | 81% |
| Total Compensation | US$5.8m | US$5.7m | 100% |
On an industry level, around 43% of total compensation represents salary and 57% is other remuneration. In People’s United Financial’s case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
People’s United Financial, Inc.’s Growth
Over the past three years, People’s United Financial, Inc. has seen its earnings per share (EPS) grow by 11% per year. Its revenue is up 16% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Historical performance can sometimes be a good indicator on what’s coming up next but if you want to peer into the company’s future you might be interested in this free visualization of analyst forecasts.
Has People’s United Financial, Inc. Been A Good Investment?
With a three year total loss of 27% for the shareholders, People’s United Financial, Inc. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude…
As we touched on above, People’s United Financial, Inc. 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. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. But on the bright side, earnings growth is positive over the same period. It’s tough for us to say CEO compensation is too generous when earnings growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.
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 People’s United Financial 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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