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Increases to CEO Compensation Might Be Put On Hold For Now at TP ICAP Group PLC (LON:TCAP)

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Shareholders of TP ICAP Group PLC (LON:TCAP) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 12 May 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for TP ICAP Group

Comparing TP ICAP Group PLC's CEO Compensation With the industry

According to our data, TP ICAP Group PLC has a market capitalization of UK£1.8b, and paid its CEO total annual compensation worth UK£1.9m over the year to December 2020. That's a notable decrease of 11% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at UK£670k.

On comparing similar companies from the same industry with market caps ranging from UK£1.4b to UK£4.6b, we found that the median CEO total compensation was UK£1.3m. This suggests that Nicolas Noel Breteau is paid more than the median for the industry. Moreover, Nicolas Noel Breteau also holds UK£145k worth of TP ICAP Group stock directly under their own name.

Component

2020

2019

Proportion (2020)

Salary

UK£670k

UK£650k

35%

Other

UK£1.3m

UK£1.5m

65%

Total Compensation

UK£1.9m

UK£2.2m

100%

On an industry level, roughly 49% of total compensation represents salary and 51% is other remuneration. TP ICAP Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

TP ICAP Group PLC's Growth

TP ICAP Group PLC has seen its earnings per share (EPS) increase by 3.0% a year over the past three years. In the last year, its revenue is down 2.2%.

We would prefer it if there was revenue growth, but it is good to see a modest EPS growth at least. It's hard to reach a conclusion about business performance right now. This may be one to watch. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has TP ICAP Group PLC Been A Good Investment?

With a total shareholder return of -38% over three years, TP ICAP Group PLC shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

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. In our study, we found 4 warning signs for TP ICAP Group you should be aware of, and 1 of them shouldn't be ignored.

Switching gears from TP ICAP 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.

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