It's Unlikely That TP ICAP Group PLC's (LON:TCAP) CEO Will See A Huge Pay Rise This Year

Shareholders of TP ICAP Group PLC (LON:TCAP) will have been dismayed by the negative share price return over the last three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 12 May 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for TP ICAP Group

Comparing TP ICAP Group PLC's CEO Compensation With the industry

Our data indicates that TP ICAP Group PLC has a market capitalization of UK£1.8b, and total annual CEO compensation was reported as UK£1.9m for the year to December 2020. That's a notable decrease of 11% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£670k.

In comparison with other companies in the industry with market capitalizations ranging from UK£1.4b to UK£4.6b, the reported median CEO total compensation was UK£1.3m. This suggests that Nicolas Noel Breteau is paid more than the median for the industry. What's more, Nicolas Noel Breteau holds UK£145k worth of shares in the company in their own name.

Component	2020	2019	Proportion (2020)
Salary	UK£670k	UK£650k	35%
Other	UK£1.3m	UK£1.5m	65%
Total Compensation	UK£1.9m	UK£2.2m	100%

Speaking on an industry level, nearly 49% of total compensation represents salary, while the remainder of 51% is other remuneration. TP ICAP Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at TP ICAP Group PLC's Growth Numbers

Over the past three years, TP ICAP Group PLC has seen its earnings per share (EPS) grow by 3.0% per year. It saw its revenue drop 2.2% over the last year.

We generally like to see a little revenue growth, but the modest EPS growth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 TP ICAP Group PLC Been A Good Investment?

The return of -38% over three years would not have pleased TP ICAP Group PLC shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 4 warning signs for TP ICAP Group (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.

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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