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Does TBC Bank Group's (LON:TBCG) CEO Salary Compare Well With Industry Peers?

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Simply Wall St
·4 min read
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Vakhtang Butskhrikidze has been the CEO of TBC Bank Group PLC (LON:TBCG) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether TBC Bank Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for TBC Bank Group

How Does Total Compensation For Vakhtang Butskhrikidze Compare With Other Companies In The Industry?

Our data indicates that TBC Bank Group PLC has a market capitalization of UK£500m, and total annual CEO compensation was reported as US$5.4m for the year to December 2019. That's a notable decrease of 40% on last year. In particular, the salary of GEL2.76m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies from the same industry with market caps ranging from UK£310m to UK£1.2b, we found that the median CEO total compensation was US$550k. Hence, we can conclude that Vakhtang Butskhrikidze is remunerated higher than the industry median. What's more, Vakhtang Butskhrikidze holds UK£7.2m worth of shares in the company in their own name.

Component

2019

2018

Proportion (2019)

Salary

US$2.8m

US$2.5m

51%

Other

US$2.6m

US$6.5m

49%

Total Compensation

US$5.4m

US$9.0m

100%

On an industry level, around 40% of total compensation represents salary and 60% is other remuneration. It's interesting to note that TBC Bank Group pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

ceo-compensation
ceo-compensation

A Look at TBC Bank Group PLC's Growth Numbers

TBC Bank Group PLC saw earnings per share stay pretty flat over the last three years. In the last year, its revenue is down 14%.

Its a bit disappointing to see that the company has failed to grow its EPS. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 TBC Bank Group PLC Been A Good Investment?

With a three year total loss of 44% for the shareholders, TBC Bank Group PLC would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we noted earlier, TBC Bank Group pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which is a bit unpleasant) in TBC Bank Group we think you should know about.

Switching gears from TBC Bank Group, 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.

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.

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