Yahoo Finance How Should Investors React To Insurance Australia Group Limited’s (ASX:IAG) CEO Pay?
PG Harmer has been the CEO of Insurance Australia Group Limited (ASX:IAG) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Insurance Australia Group
How Does PG Harmer’s Compensation Compare With Similar Sized Companies?
Our data indicates that Insurance Australia Group Limited is worth AU$16.3b, and total annual CEO compensation is AU$4m. That’s a notable increase of 14% on last year. We looked at a group of companies with market capitalizations over AU$11.3b and the median CEO compensation was AU$6m.
So PG Harmer is paid around the average of the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
You can see a visual representation of the CEO compensation at Insurance Australia Group, below.
Is Insurance Australia Group Limited Growing?
On average over the last three years, Insurance Australia Group Limited has grown earnings per share (EPS) by 18% each year. In the last year, its revenue is down -7.1%.
This demonstrates that the company has been improving recently. A good result. Revenue growth is a real positive for growth, but ultimately profits are more important.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Insurance Australia Group Limited Been A Good Investment?
Most shareholders would probably be pleased with Insurance Australia Group Limited for providing a total return of 44% over three years. This strong performance might mean some shareholders don’t mind if the CEO is paid more than is normal for a company of its size.
In Summary…
PG Harmer is paid around the same as most CEOs of large companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Indeed, many might consider the pay rather modest, given the solid company performance! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Insurance Australia Group Limited.
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
