Shareholders Will Probably Hold Off On Increasing Paragon Banking Group PLC's (LON:PAG) CEO Compensation For The Time Being

Key Insights

• Paragon Banking Group will host its Annual General Meeting on 1st of March
• CEO Nigel Terrington's total compensation includes salary of UK£629.0k
• The overall pay is 48% above the industry average
• Paragon Banking Group's total shareholder return over the past three years was 36% while its EPS grew by 42% over the past three years

CEO Nigel Terrington has done a decent job of delivering relatively good performance at Paragon Banking Group PLC (LON:PAG) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 1st of March. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Paragon Banking Group

Comparing Paragon Banking Group PLC's CEO Compensation With The Industry

Our data indicates that Paragon Banking Group PLC has a market capitalization of UK£1.3b, and total annual CEO compensation was reported as UK£3.5m for the year to September 2022. We note that's an increase of 15% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at UK£629k.

On comparing similar companies from the the United Kingdom Mortgage industry with market caps ranging from UK£829m to UK£2.7b, we found that the median CEO total compensation was UK£2.3m. Hence, we can conclude that Nigel Terrington is remunerated higher than the industry median. Moreover, Nigel Terrington also holds UK£7.4m worth of Paragon Banking Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2022	2021	Proportion (2022)
Salary	UK£629k	UK£599k	18%
Other	UK£2.8m	UK£2.4m	82%
Total Compensation	UK£3.5m	UK£3.0m	100%

On an industry level, around 41% of total compensation represents salary and 59% is other remuneration. In Paragon Banking Group'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 Paragon Banking Group PLC's Growth Numbers

Paragon Banking Group PLC has seen its earnings per share (EPS) increase by 42% a year over the past three years. It achieved revenue growth of 15% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 Paragon Banking Group PLC Been A Good Investment?

Most shareholders would probably be pleased with Paragon Banking Group PLC for providing a total return of 36% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 2 warning signs (and 1 which is concerning) in Paragon Banking Group we think you should know about.

Important note: Paragon Banking Group 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.