29/09/2020

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Here’s What We Think About International Personal Finance’s (LON:IPF) CEO Pay

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Gerard Ryan has been the CEO of International Personal Finance plc (LON:IPF) since 2012, and this article will examine the executive’s compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for International Personal Finance.

Check out our latest analysis for International Personal Finance

How Does Total Compensation For Gerard Ryan Compare With Other Companies In The Industry?

According to our data, International Personal Finance plc has a market capitalization of UK£137m, and paid its CEO total annual compensation worth UK£1.3m over the year to December 2019. We note that’s an increase of 8.8% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£530k.

For comparison, other companies in the same industry with market capitalizations ranging between UK£79m and UK£316m had a median total CEO compensation of UK£541k. This suggests that Gerard Ryan is paid more than the median for the industry. Moreover, Gerard Ryan also holds UK£777k worth of International Personal Finance stock directly under their own name.

Component 2019 2018 Proportion (2019)
Salary UK£530k UK£516k 42%
Other UK£730k UK£642k 58%
Total Compensation UK£1.3m UK£1.2m 100%

Speaking on an industry level, nearly 56% of total compensation represents salary, while the remainder of 44% is other remuneration. In International Personal Finance’s case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It’s important to note that a slant towards non-salary compensation suggests that total pay is tied to the company’s performance.

A Look at International Personal Finance plc’s Growth Numbers

Earnings per share at International Personal Finance plc are much the same as they were three years ago, albeit slightly lower. Its revenue is up 2.6% over the last year.

The lack of earnings growth is certainly unimpressive. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company’s future earnings..

Has International Personal Finance plc Been A Good Investment?

Given the total shareholder loss of 59% over three years, many shareholders in International Personal Finance plc are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary…

As we noted earlier, International Personal Finance pays its CEO higher than the norm for similar-sized companies belonging to the same industry. This doesn’t look good against shareholder returns, which have been negative for the past three years. Arguably worse, we’ve been waiting for positive earnings growth for the last three years. Overall, with such poor performance, shareholder’s would probably have questions if the company decided to give the CEO a raise.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for International Personal Finance (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.