In 2012 Mike Corbat was appointed CEO of Citigroup Inc. (NYSE:C). First, this article will compare CEO compensation with compensation at other large companies. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Mike Corbat’s Compensation Compare With Similar Sized Companies?
According to our data, Citigroup Inc. has a market capitalization of US$146b, and pays its CEO total annual compensation worth US$24m. (This number is for the twelve months until December 2018). That’s a notable increase of 36% on last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.5m. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO compensation was US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren’t that many of them.
It would therefore appear that Citigroup Inc. pays Mike Corbat more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Citigroup has changed over time.
Is Citigroup Inc. Growing?
Over the last three years Citigroup Inc. has shrunk its earnings per share by an average of 48% per year (measured with a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.
Unfortunately, earnings per share have trended lower over the last three years. And the flat revenue hardly impresses. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has Citigroup Inc. Been A Good Investment?
Most shareholders would probably be pleased with Citigroup Inc. for providing a total return of 54% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared the total CEO remuneration paid by Citigroup Inc., and compared it to remuneration at a group of other large companies. We found that it pays well over the median amount paid in the benchmark group.We think many shareholders would be underwhelmed with the business growth over the last three years.
But clearly there are some positives, because investors have done well over the same time frame. So on this analysis we’d stop short of criticizing the level of CEO compensation. Shareholders may want to check for free if Citigroup insiders are buying or selling shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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