A Quick Analysis On Bank of Ireland Group's (ISE:BIRG) CEO Salary

Francesca McDonagh became the CEO of Bank of Ireland Group plc (ISE:BIRG) in 2017, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Bank of Ireland Group.

View our latest analysis for Bank of Ireland Group

How Does Total Compensation For Francesca McDonagh Compare With Other Companies In The Industry?

According to our data, Bank of Ireland Group plc has a market capitalization of €3.5b, and paid its CEO total annual compensation worth €958k over the year to December 2019. That is, the compensation was roughly the same as last year. Notably, the salary which is €950.0k, represents most of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from €1.6b to €5.2b, we found that the median CEO total compensation was €877k. From this we gather that Francesca McDonagh is paid around the median for CEOs in the industry.

On an industry level, around 70% of total compensation represents salary and 30% is other remuneration. Bank of Ireland Group is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Bank of Ireland Group plc's Growth Numbers

Bank of Ireland Group plc has reduced its earnings per share by 57% a year over the last three years. It saw its revenue drop 41% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Bank of Ireland Group plc Been A Good Investment?

Given the total shareholder loss of 54% over three years, many shareholders in Bank of Ireland Group plc are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Bank of Ireland Group pays its CEO a majority of compensation through a salary. As we noted earlier, Bank of Ireland Group pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Bank of Ireland Group that investors should be aware of in a dynamic business environment.

Important note: Bank of Ireland 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. 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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