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Is OFG Bancorp's (NYSE:OFG) CEO Salary Justified?

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José Fernández became the CEO of OFG Bancorp (NYSE:OFG) in 2004. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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.

See our latest analysis for OFG Bancorp

How Does José Fernández's Compensation Compare With Similar Sized Companies?

According to our data, OFG Bancorp has a market capitalization of US$1.2b, and paid its CEO total annual compensation worth US$2.8m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$865k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO total compensation was US$3.9m.

So José Fernández receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

You can see, below, how CEO compensation at OFG Bancorp has changed over time.

NYSE:OFG CEO Compensation, January 6th 2020
NYSE:OFG CEO Compensation, January 6th 2020

Is OFG Bancorp Growing?

OFG Bancorp has increased its earnings per share (EPS) by an average of 25% a year, over the last three years (using a line of best fit). It achieved revenue growth of 1.7% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Shareholders might be interested in this free visualization of analyst forecasts.

Has OFG Bancorp Been A Good Investment?

I think that the total shareholder return of 90%, over three years, would leave most OFG Bancorp shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Remuneration for José Fernández is close enough to the median pay for a CEO of a similar sized company .

Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. So one could argue the CEO compensation is quite modest, if you consider company performance! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling OFG Bancorp (free visualization of insider trades).

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.