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What Can We Make Of Popular's (NASDAQ:BPOP) CEO Compensation?

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Ignacio Alvarez became the CEO of Popular, Inc. (NASDAQ:BPOP) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Popular pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Popular

How Does Total Compensation For Ignacio Alvarez Compare With Other Companies In The Industry?

Our data indicates that Popular, Inc. has a market capitalization of US$3.1b, and total annual CEO compensation was reported as US$5.1m for the year to December 2019. Notably, that's an increase of 16% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.1m.

On examining similar-sized companies in the industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$4.9m. So it looks like Popular compensates Ignacio Alvarez in line with the median for the industry. What's more, Ignacio Alvarez holds US$6.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2019

2018

Proportion (2019)

Salary

US$1.1m

US$1.0m

21%

Other

US$4.0m

US$3.4m

79%

Total Compensation

US$5.1m

US$4.4m

100%

On an industry level, around 43% of total compensation represents salary and 57% is other remuneration. In Popular's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader 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 Popular, Inc.'s Growth Numbers

Over the past three years, Popular, Inc. has seen its earnings per share (EPS) grow by 34% per year. Its revenue is down 8.4% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Popular, Inc. Been A Good Investment?

With a three year total loss of 1.3% for the shareholders, Popular, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As previously discussed, Ignacio is compensated close to the median for companies of its size, and which belong to the same industry. At the same time, the company has logged negative shareholder returns over the last three years. But EPS growth is moving in a favorable direction, certainly a positive sign. Overall, we wouldn't say Ignacio is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Popular (1 can't be ignored!) that you should be aware of before investing here.

Switching gears from Popular, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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@simplywallst.com.