Yahoo Finance Should You Worry About Insurance Australia Group Limited's (ASX:IAG) CEO Salary Level?
PG Harmer became the CEO of Insurance Australia Group Limited (ASX:IAG) in 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for Insurance Australia Group
How Does PG Harmer's Compensation Compare With Similar Sized Companies?
Our data indicates that Insurance Australia Group Limited is worth AU$12b, and total annual CEO compensation was reported as AU$4.8m for the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$1.8m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined companies with market caps from AU$6.2b to AU$19b, and discovered that the median CEO total compensation of that group was AU$4.4m.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Talking in terms of the sector, salary represented approximately 34% of total compensation out of all the companies we analysed, while other remuneration made up 66% of the pie. So it seems like there isn't a significant difference between Insurance Australia Group and the broader market, in terms of salary allocation in the overall compensation package.
That means PG Harmer receives fairly typical remuneration for the CEO of a company that size. 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, below, how CEO compensation at Insurance Australia Group has changed over time.
Is Insurance Australia Group Limited Growing?
Insurance Australia Group Limited has seen earnings per share (EPS) move positively by an average of 1.9% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 6.7%.
I'm not particularly impressed by the revenue growth, but it is good to see modest EPS growth. Considering these factors I'd say performance has been pretty decent, though not amazing. Shareholders might be interested in this free visualization of analyst forecasts.
Has Insurance Australia Group Limited Been A Good Investment?
With a total shareholder return of 0.8% over three years, Insurance Australia Group Limited has done okay by shareholders. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
PG Harmer is paid around the same as most CEOs of similar size companies.
The company isn't showing particularly great growth, and shareholder turns haven't been particularly inspiring in the last few years. But we don't think the CEO compensation is a problem. Moving away from CEO compensation for the moment, we've identified 2 warning signs for Insurance Australia Group that you should be aware of before investing.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
