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Is International Personal Finance plc (LON:IPF) Overpaying Its CEO?

Simply Wall St

In 2012 Gerard Ryan was appointed CEO of International Personal Finance plc (LON:IPF). 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for International Personal Finance

How Does Gerard Ryan's Compensation Compare With Similar Sized Companies?

Our data indicates that International Personal Finance plc is worth UK£375m, and total annual CEO compensation was reported as UK£1.2m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at UK£516k. When we examined a selection of companies with market caps ranging from UK£154m to UK£617m, we found the median CEO total compensation was UK£673k.

It would therefore appear that International Personal Finance plc pays Gerard Ryan more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. 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 International Personal Finance has changed from year to year.

LSE:IPF CEO Compensation, December 25th 2019

Is International Personal Finance plc Growing?

International Personal Finance plc has increased its earnings per share (EPS) by an average of 1.2% a year, over the last three years (using a line of best fit). Its revenue is up 6.0% over last year.

I'm not particularly impressed by the revenue growth, but the modest improvement in EPS is good. Considering these factors I'd say performance has been pretty decent, though not amazing. Shareholders might be interested in this free visualization of analyst forecasts.

Has International Personal Finance plc Been A Good Investment?

International Personal Finance plc has served shareholders reasonably well, with a total return of 25% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

We compared total CEO remuneration at International Personal Finance plc with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

We generally prefer to see stronger EPS growth, and we're not particularly impressed with the total shareholder return, over the last three years. In conclusion we think the company should definitely focus on improving the business before awarding any large pay rises. Shareholders may want to check for free if International Personal Finance 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.

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.

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