Dan Houston has been the CEO of Principal Financial Group, Inc. (NASDAQ:PFG) since 2015. This analysis aims first to contrast CEO compensation with other large companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Dan Houston's Compensation Compare With Similar Sized Companies?
According to our data, Principal Financial Group, Inc. has a market capitalization of US$15b, and paid its CEO total annual compensation worth US$12m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$900k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
So Dan Houston receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see a visual representation of the CEO compensation at Principal Financial Group, below.
Is Principal Financial Group, Inc. Growing?
Principal Financial Group, Inc. has increased its earnings per share (EPS) by an average of 6.4% a year, over the last three years (using a line of best fit). Its revenue is up 16% over last year.
I think the revenue growth is good. And the modest growth in earnings per share isn't bad, either. Although we'll stop short of calling the stock a top performer, we think the company has potential. It could be important to check this free visual depiction of what analysts expect for the future.
Has Principal Financial Group, Inc. Been A Good Investment?
Since shareholders would have lost about 0.2% over three years, some Principal Financial Group, Inc. shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
Dan Houston is paid around what is normal the leaders of larger companies.
We would like to see somewhat stronger per share growth. And we think the shareholder returns - over three years - have been underwhelming. So many would argue that the CEO is certainly not underpaid. Shareholders may want to check for free if Principal Financial Group insiders are buying or selling shares.
Important note: Principal Financial Group may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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