Why Barclays' (LON:BARC) CEO Pay Matters

Jes Staley became the CEO of Barclays PLC (LON:BARC) in 2015, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Barclays pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Barclays

Comparing Barclays PLC's CEO Compensation With the industry

At the time of writing, our data shows that Barclays PLC has a market capitalization of UK£27b, and reported total annual CEO compensation of UK£4.0m for the year to December 2020. That's a notable decrease of 32% on last year. We note that the salary portion, which stands at UK£2.35m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations over UK£5.7b , the reported median total CEO compensation was UK£4.0m. So it looks like Barclays compensates Jes Staley in line with the median for the industry. Moreover, Jes Staley also holds UK£8.8m worth of Barclays stock directly under their own name.

On an industry level, roughly 48% of total compensation represents salary and 52% is other remuneration. Barclays pays out 59% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Barclays PLC's Growth

Barclays PLC has seen its earnings per share (EPS) increase by 37% a year over the past three years. In the last year, its revenue is down 14%.

Overall this is a positive result for shareholders, showing that the company has improved in recent 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 Barclays PLC Been A Good Investment?

With a three year total loss of 22% for the shareholders, Barclays PLC would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we touched on above, Barclays PLC 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. At the same time, the company has logged negative shareholder returns over the last three years. But EPS growth is moving in a favorable direction, certainly a positive sign. Overall, we wouldn't say Jes is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Barclays that investors should think about before committing capital to this stock.

Important note: Barclays 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.

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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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