In 2008 Alex Wynaendts was appointed CEO of Aegon N.V. (AMS:AGN). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Alex Wynaendts's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Aegon N.V. has a market cap of €4.6b, and reported total annual CEO compensation of €3.8m for the year to December 2019. That's less than last year. While we always look at total compensation first, we note that the salary component is less, at €1.3m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined companies with market caps from €3.7b to €11b, and discovered that the median CEO total compensation of that group was €2.3m.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Speaking on an industry level, we can see that nearly 43% of total compensation represents salary, while the remainder of 57% is other remuneration. Our data reveals that Aegon allocates salary in line with the wider market.
Thus we can conclude that Alex Wynaendts receives more in total compensation than the median of a group of companies in the same market, and of similar size to Aegon N.V.. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance. You can see, below, how CEO compensation at Aegon has changed over time.
Is Aegon N.V. Growing?
Over the last three years Aegon N.V. has shrunk its earnings per share by an average of 13% per year (measured with a line of best fit). It achieved revenue growth of 258% over the last year.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. Shareholders might be interested in this free visualization of analyst forecasts.
Has Aegon N.V. Been A Good Investment?
With a three year total loss of 42%, Aegon N.V. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared the total CEO remuneration paid by Aegon N.V., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. Shareholders may wish to consider further research. Although we don't think the CEO pay is too high, it is probably more on the generous side of things. Moving away from CEO compensation for the moment, we've identified 3 warning signs for Aegon that you should be aware of before investing.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
If you spot an error that warrants correction, please contact the editor at email@example.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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