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Bill Demchak has been the CEO of The PNC Financial Services Group, Inc. (NYSE:PNC) since 2013. This analysis aims first to contrast CEO compensation with other large companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Bill Demchak's Compensation Compare With Similar Sized Companies?
Our data indicates that The PNC Financial Services Group, Inc. is worth US$60b, and total annual CEO compensation is US$16m. (This number is for the twelve months until December 2018). That's a notable increase of 13% on last year. While we always look at total compensation first, we note that the salary component is less, at US$1.1m. 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).
Thus we can conclude that Bill Demchak receives more in total compensation than the median of a group of large companies in the same market as The PNC Financial Services Group, Inc.. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at PNC Financial Services Group has changed from year to year.
Is The PNC Financial Services Group, Inc. Growing?
Over the last three years The PNC Financial Services Group, Inc. has grown its earnings per share (EPS) by an average of 19% per year (using a line of best fit). It achieved revenue growth of 4.3% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings.
Has The PNC Financial Services Group, Inc. Been A Good Investment?
Most shareholders would probably be pleased with The PNC Financial Services Group, Inc. for providing a total return of 65% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount The PNC Financial Services Group, Inc. pays its CEO, and compared it to the amount paid by other large companies. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Whatever your view on compensation, you might want to check if insiders are buying or selling PNC Financial Services Group shares (free trial).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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.
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. Thank you for reading.