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Ralph A. J. Hamers has been the CEO of ING Groep N.V. (AMS:INGA) since 2013. This analysis aims first to contrast CEO compensation with other large companies. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Ralph A. J. Hamers’s Compensation Compare With Similar Sized Companies?
According to our data, ING Groep N.V. has a market capitalization of €40b, and pays its CEO total annual compensation worth €2.6m. (This figure is for the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at €1.7m. We took a group of companies with market capitalizations over €7.0b, and calculated the median CEO compensation to be €3.6m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts – even though some are quite a bit bigger than others).
That means Ralph A. J. Hamers receives fairly typical remuneration for the CEO of a large company. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at ING Groep has changed from year to year.
Is ING Groep N.V. Growing?
On average over the last three years, ING Groep N.V. has grown earnings per share (EPS) by 5.7% each year (using a line of best fit). It saw its revenue drop -1.5% over the last year.
I would argue that the lack of revenue growth in the last year is less than ideal, but the improvement in EPS is good. It’s hard to reach a conclusion about business performance right now. This may be one to watch. It could be important to check this free visual depiction of what analysts expect for the future.
Has ING Groep N.V. Been A Good Investment?
With a total shareholder return of 14% over three years, ING Groep N.V. shareholders would, in general, be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
Remuneration for Ralph A. J. Hamers is close enough to the median pay for a CEO of a large company .
We see room for improved growth, as well as fairly unremarkable returns over the last three years. While the CEO may not be underpaid, we don’t think the pay is too generous either. Whatever your view on compensation, you might want to check if insiders are buying or selling ING Groep shares (free trial).
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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.