We have been pretty impressed with the performance at Popular, Inc. (NASDAQ:BPOP) recently and CEO Ignacio Alvarez deserves a mention for their role in it. Coming up to the next AGM on 06 May 2021, shareholders would be keeping this in mind. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.
Check out our latest analysis for Popular
Comparing Popular, Inc.'s CEO Compensation With the industry
Our data indicates that Popular, Inc. has a market capitalization of US$6.2b, and total annual CEO compensation was reported as US$4.8m for the year to December 2020. We note that's a small decrease of 5.9% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.1m.
In comparison with other companies in the industry with market capitalizations ranging from US$4.0b to US$12b, the reported median CEO total compensation was US$4.7m. From this we gather that Ignacio Alvarez is paid around the median for CEOs in the industry. Furthermore, Ignacio Alvarez directly owns US$14m worth of shares in the company, implying that they are deeply invested in the company's success.
|
Component |
2020 |
2019 |
Proportion (2020) |
|
Salary |
US$1.1m |
US$1.1m |
23% |
|
Other |
US$3.7m |
US$4.0m |
77% |
|
Total Compensation |
US$4.8m |
US$5.1m |
100% |
Talking in terms of the industry, salary represented approximately 42% of total compensation out of all the companies we analyzed, while other remuneration made up 58% of the pie. In Popular's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Popular, Inc.'s Growth Numbers
Popular, Inc.'s earnings per share (EPS) grew 79% per year over the last three years. In the last year, its revenue is down 9.5%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Popular, Inc. Been A Good Investment?
Boasting a total shareholder return of 73% over three years, Popular, Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
To Conclude...
The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 3 warning signs for Popular that investors should be aware of in a dynamic business environment.
Important note: Popular is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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 (at) simplywallst.com.
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April 29, 2021 at 03:57PM
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The Compensation For Popular, Inc.'s (NASDAQ:BPOP) CEO Looks Deserved And Here's Why - Yahoo Finance
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