Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
In 1970 Dan Houston was appointed CEO of Principal Financial Group, Inc. (NASDAQ:PFG). First, this article will compare CEO compensation with compensation at other large companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for Principal Financial Group
How Does Dan Houston's Compensation Compare With Similar Sized Companies?
Our data indicates that Principal Financial Group, Inc. is worth US$15b, and total annual CEO compensation is US$12m. (This is based on the year to December 2018). That's a fairly small increase of 2.2% on year before. We think total compensation is more important but we note that the CEO salary is lower, at US$900k. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$12m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
So Dan Houston is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see a visual representation of the CEO compensation at Principal Financial Group, below.
Is Principal Financial Group, Inc. Growing?
On average over the last three years, Principal Financial Group, Inc. has grown earnings per share (EPS) by 19% each year (using a line of best fit). In the last year, its revenue is up 8.4%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. You might want to check this free visual report on analyst forecasts for future earnings.
Has Principal Financial Group, Inc. Been A Good Investment?
I think that the total shareholder return of 35%, over three years, would leave most Principal Financial Group, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
Remuneration for Dan Houston is close enough to the median pay for a CEO of a large company .
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Indeed, many might consider the pay rather modest, given the solid company performance! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Principal Financial Group (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.