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How Much Did Interpublic Group of Companies' (NYSE:IPG) CEO Pocket Last Year?

Simply Wall St
·4 min read

Michael Roth has been the CEO of The Interpublic Group of Companies, Inc. (NYSE:IPG) since 2005, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Interpublic Group of Companies pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Interpublic Group of Companies

How Does Total Compensation For Michael Roth Compare With Other Companies In The Industry?

According to our data, The Interpublic Group of Companies, Inc. has a market capitalization of US$9.2b, and paid its CEO total annual compensation worth US$17m 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$1.7m.

On examining similar-sized companies in the industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$14m. From this we gather that Michael Roth is paid around the median for CEOs in the industry. Moreover, Michael Roth also holds US$28m worth of Interpublic Group of Companies stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2019

2018

Proportion (2019)

Salary

US$1.7m

US$1.5m

10%

Other

US$15m

US$15m

90%

Total Compensation

US$17m

US$17m

100%

Talking in terms of the industry, salary represented approximately 22% of total compensation out of all the companies we analyzed, while other remuneration made up 78% of the pie. Interpublic Group of Companies sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

A Look at The Interpublic Group of Companies, Inc.'s Growth Numbers

Over the last three years, The Interpublic Group of Companies, Inc. has shrunk its earnings per share by 2.6% per year. In the last year, its revenue is down 4.6%.

Its a bit disappointing to see that the company has failed to grow its EPS. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 The Interpublic Group of Companies, Inc. Been A Good Investment?

The Interpublic Group of Companies, Inc. has generated a total shareholder return of 32% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

As previously discussed, Michael is compensated close to the median for companies of its size, and which belong to the same industry. According to our analysis, Interpublic Group of Companies is suffering from uninspiring EPS growth, and even though shareholder returns are stable, they are hardly impressive. These figures do not go well against CEO compensation, which is more or less equal to the industry median. We wouldn't go as far as saying CEO compensation is inappropriate, but we don't think the executive is underpaid.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 3 warning signs for Interpublic Group of Companies 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.

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