Stock Analysis

What We Learned About Popular's (NASDAQ:BPOP) CEO Compensation

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This article will reflect on the compensation paid to Ignacio Alvarez who has served as CEO of Popular, Inc. (NASDAQ:BPOP) since 2017. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Popular

Comparing Popular, Inc.'s CEO Compensation With the industry

According to our data, Popular, Inc. has a market capitalization of US$4.7b, and paid its CEO total annual compensation worth US$5.1m over the year to December 2019. That's a notable increase of 16% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.1m.

On examining similar-sized companies in the industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$4.4m. From this we gather that Ignacio Alvarez is paid around the median for CEOs in the industry. Furthermore, Ignacio Alvarez directly owns US$9.6m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20192018Proportion (2019)
Salary US$1.1m US$1.0m 21%
Other US$4.0m US$3.4m 79%
Total CompensationUS$5.1m US$4.4m100%

Speaking on an industry level, nearly 43% of total compensation represents salary, while the remainder of 57% is other remuneration. Popular sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

NasdaqGS:BPOP CEO Compensation December 29th 2020

Popular, Inc.'s Growth

Popular, Inc.'s earnings per share (EPS) grew 42% per year over the last three years. It saw its revenue drop 11% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. 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 Popular, Inc. Been A Good Investment?

Boasting a total shareholder return of 74% over three years, Popular, Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

As we touched on above, Popular, Inc. 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. Few would be critical of the leadership, since returns have been juicy and EPS are moving in the right direction. So one could argue that CEO compensation is quite modest, if you consider company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Popular that investors should look into moving forward.

Important note: Popular 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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