This article will reflect on the compensation paid to Johan Thijs who has served as CEO of KBC Group NV (EBR:KBC) since 2012. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for KBC Group.
Comparing KBC Group NV’s CEO Compensation With the industry
Our data indicates that KBC Group NV has a market capitalization of €20b, and total annual CEO compensation was reported as €2.4m for the year to December 2019. That’s a modest increase of 3.7% on the prior year. In particular, the salary of €1.25m, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the industry with market capitalizations above €6.8b, reported a median total CEO compensation of €2.1m. From this we gather that Johan Thijs is paid around the median for CEOs in the industry.
Speaking on an industry level, nearly 66% of total compensation represents salary, while the remainder of 34% is other remuneration. It’s interesting to note that KBC Group allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion – which is generally tied to performance, is lower.
A Look at KBC Group NV’s Growth Numbers
Over the last three years, KBC Group NV has shrunk its earnings per share by 8.3% per year. It saw its revenue drop 5.6% over the last year.
Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has KBC Group NV Been A Good Investment?
With a three year total loss of 25% for the shareholders, KBC Group NV would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
As we touched on above, KBC Group NV is currently paying a compensation that’s close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, earnings growth and shareholder returns have been in the red for the last three years. It’s tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.
Shareholders may want to check for free if KBC Group insiders are buying or selling shares.
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.
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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.
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