It's Unlikely That MetLife, Inc.'s (NYSE:MET) CEO Will See A Huge Pay Rise This Year

Key Insights

• MetLife's Annual General Meeting to take place on 17th of June
• Salary of US$1.50m is part of CEO Michel Khalaf's total remuneration
• The total compensation is 74% higher than the average for the industry
• MetLife's EPS declined by 11% over the past three years while total shareholder return over the past three years was 41%

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Despite strong share price growth of 41% for MetLife, Inc. (NYSE:MET) over the last few years, earnings growth has been disappointing, which suggests something is amiss. The upcoming AGM on 17th of June may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

Check out our latest analysis for MetLife

How Does Total Compensation For Michel Khalaf Compare With Other Companies In The Industry?

At the time of writing, our data shows that MetLife, Inc. has a market capitalization of US$53b, and reported total annual CEO compensation of US$20m for the year to December 2024. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.5m.

On comparing similar companies in the American Insurance industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$12m. Hence, we can conclude that Michel Khalaf is remunerated higher than the industry median. What's more, Michel Khalaf holds US$41m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 14% of total compensation out of all the companies we analyzed, while other remuneration made up 86% of the pie. MetLife 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.

A Look at MetLife, Inc.'s Growth Numbers

Over the last three years, MetLife, Inc. has shrunk its earnings per share by 11% per year. Its revenue is up 8.8% over the last year.

The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. 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 MetLife, Inc. Been A Good Investment?

We think that the total shareholder return of 41%, over three years, would leave most MetLife, 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...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for MetLife that investors should look into moving forward.

Switching gears from MetLife, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.