Bill Spence has been the CEO of PPL Corporation (NYSE:PPL) since 2011. This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Bill Spence's Compensation Compare With Similar Sized Companies?
Our data indicates that PPL Corporation is worth US$22b, and total annual CEO compensation is US$11m. (This is based on the year to December 2018). That's below the compensation, last year. We think total compensation is more important but we note that the CEO salary is lower, at US$1.2m. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. (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 Bill Spence receives fairly typical remuneration for the CEO of a large company. 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 PPL has changed over time.
Is PPL Corporation Growing?
On average over the last three years, PPL Corporation has shrunk earnings per share by 7.3% each year (measured with a line of best fit). In the last year, its revenue is up 4.5%.
Few shareholders would be pleased to read that earnings per share are lower over three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has PPL Corporation Been A Good Investment?
With a three year total loss of 1.9%, PPL Corporation would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
Bill Spence is paid around what is normal the leaders of larger companies.
The company isn't growing EPS, and shareholder returns have been disappointing. Few would argue that it's wise for the company to pay any more, before returns improve. Whatever your view on compensation, you might want to check if insiders are buying or selling PPL shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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