We Think Citizens Financial Group, Inc.'s (NYSE:CFG) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• Citizens Financial Group to hold its Annual General Meeting on 25th of April
• Total pay for CEO Bruce Van Saun includes US$1.49m salary
• The total compensation is similar to the average for the industry
• Citizens Financial Group's EPS declined by 7.3% over the past three years while total shareholder loss over the past three years was 13%

Shareholders will probably not be too impressed with the underwhelming results at Citizens Financial Group, Inc. (NYSE:CFG) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 25th of April. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Citizens Financial Group

Comparing Citizens Financial Group, Inc.'s CEO Compensation With The Industry

According to our data, Citizens Financial Group, Inc. has a market capitalization of US$15b, and paid its CEO total annual compensation worth US$11m over the year to December 2023. We note that's a small decrease of 5.4% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.5m.

For comparison, other companies in the American Banks industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$11m. From this we gather that Bruce Van Saun is paid around the median for CEOs in the industry. What's more, Bruce Van Saun holds US$38m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	US$1.5m	US$1.5m	13%
Other	US$9.6m	US$10m	87%
Total Compensation	US$11m	US$12m	100%

On an industry level, around 45% of total compensation represents salary and 55% is other remuneration. Citizens Financial Group pays a modest slice of remuneration through salary, as compared to the broader 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 Citizens Financial Group, Inc.'s Growth Numbers

Over the last three years, Citizens Financial Group, Inc. has shrunk its earnings per share by 7.3% per year. Its revenue is down 6.4% over the previous year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Citizens Financial Group, Inc. Been A Good Investment?

Since shareholders would have lost about 13% over three years, some Citizens Financial Group, Inc. investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Citizens Financial Group that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.