T. Rowe Price Group, Inc.'s (NASDAQ:TROW) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• T. Rowe Price Group's Annual General Meeting to take place on 7th of May
• Total pay for CEO Rob Sharps includes US$350.0k salary
• Total compensation is similar to the industry average
• T. Rowe Price Group's three-year loss to shareholders was 31% while its EPS was down 11% over the past three years

Shareholders will probably not be too impressed with the underwhelming results at T. Rowe Price Group, Inc. (NASDAQ:TROW) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 7th of May. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for T. Rowe Price Group

How Does Total Compensation For Rob Sharps Compare With Other Companies In The Industry?

Our data indicates that T. Rowe Price Group, Inc. has a market capitalization of US$24b, and total annual CEO compensation was reported as US$13m for the year to December 2023. That's slightly lower by 7.2% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$350k.

For comparison, other companies in the American Capital Markets industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$17m. So it looks like T. Rowe Price Group compensates Rob Sharps in line with the median for the industry. Moreover, Rob Sharps also holds US$48m worth of T. Rowe Price Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$350k	US$350k	3%
Other	US$12m	US$13m	97%
Total Compensation	US$13m	US$14m	100%

On an industry level, around 10% of total compensation represents salary and 90% is other remuneration. Interestingly, the company has chosen to go down an unconventional route in that it pays a smaller salary to Rob Sharps as compared to non-salary compensation over the one-year period examined. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

T. Rowe Price Group, Inc.'s Growth

Over the last three years, T. Rowe Price Group, Inc. has shrunk its earnings per share by 11% per year. It achieved revenue growth of 8.3% over the last year.

Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 T. Rowe Price Group, Inc. Been A Good Investment?

Few T. Rowe Price Group, Inc. shareholders would feel satisfied with the return of -31% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

T. Rowe Price Group prefers rewarding its CEO through non-salary benefits. Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 2 warning signs for T. Rowe Price Group (1 shouldn't be ignored!) that you should be aware of before investing here.

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.