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How Should Investors React To Standard Chartered's (LON:STAN) CEO Pay?
Bill Winters has been the CEO of Standard Chartered PLC (LON:STAN) since 2015, 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 Standard Chartered.
Check out our latest analysis for Standard Chartered
Comparing Standard Chartered PLC's CEO Compensation With the industry
At the time of writing, our data shows that Standard Chartered PLC has a market capitalization of UK£14b, and reported total annual CEO compensation of UK£5.9m for the year to December 2019. That's a slightly lower by 5.6% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£2.4m.
For comparison, other companies in the industry with market capitalizations above UK£6.3b, reported a median total CEO compensation of UK£1.7m. Hence, we can conclude that Bill Winters is remunerated higher than the industry median. What's more, Bill Winters holds UK£8.0m worth of shares in the company in their own name.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | UK£2.4m | UK£2.3m | 40% |
| Other | UK£3.6m | UK£4.0m | 60% |
| Total Compensation | UK£5.9m | UK£6.3m | 100% |
Talking in terms of the industry, salary represented approximately 44% of total compensation out of all the companies we analyzed, while other remuneration made up 56% of the pie. There isn't a significant difference between Standard Chartered and the broader market, in terms of salary allocation in the overall compensation package. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Standard Chartered PLC's Growth
Standard Chartered PLC has seen its earnings per share (EPS) increase by 50% a year over the past three years. In the last year, its revenue changed by just 0.6%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Standard Chartered PLC Been A Good Investment?
With a three year total loss of 43% for the shareholders, Standard Chartered PLC would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
As we touched on above, Standard Chartered PLC is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, the earnings per share growth is certainly impressive, but we cannot say the same about the uninspiring shareholder returns (over the last three years). Considering overall performance, we can't say Bill is underpaid, in fact compensation is definitely on the higher side.
CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Standard Chartered (free visualization of insider trades).
Switching gears from Standard Chartered, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
M
The Foxhole
When oil spikes, crude gets the attention. I think the boring refiner in the middle is where it gets interesting, and a record shows why.
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Andrew LeggetMarket Insights
Great earnings season, but are the earnings real?
At first glance, this was the strongest earnings season in years. But when you look at where the growth actually came from, the story splits into two very different pictures.
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About LSE:STAN
Standard Chartered
Provides various banking products and services in Asia, Africa, the Middle East, Europe, and the Americas.
Excellent balance sheet with acceptable track record.
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