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Is TBC Bank Group PLC's (LON:TBCG) CEO Overpaid Relative To Its Peers?

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Simply Wall St
·3 min read
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Vakhtang Butskhrikidze became the CEO of TBC Bank Group PLC (LON:TBCG) in 2016. 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for TBC Bank Group

How Does Vakhtang Butskhrikidze's Compensation Compare With Similar Sized Companies?

According to our data, TBC Bank Group PLC has a market capitalization of UK£681m, and paid its CEO total annual compensation worth GEL3.4m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at GEL929k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$1.2m.

It would therefore appear that TBC Bank Group PLC pays Vakhtang Butskhrikidze more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at TBC Bank Group has changed over time.

LSE:TBCG CEO Compensation, February 7th 2020
LSE:TBCG CEO Compensation, February 7th 2020

Is TBC Bank Group PLC Growing?

Over the last three years TBC Bank Group PLC has grown its earnings per share (EPS) by an average of 16% per year (using a line of best fit). In the last year, its revenue is up 17%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. It could be important to check this free visual depiction of what analysts expect for the future.

Has TBC Bank Group PLC Been A Good Investment?

With a three year total loss of 6.4%, TBC Bank Group PLC would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared total CEO remuneration at TBC Bank Group PLC with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling TBC Bank Group shares (free trial).

If you want to buy a stock that is better than TBC Bank Group, this free list of high return, low debt companies is a great place to look.

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.