Yahoo Finance How Much Did InterContinental Hotels Group's (LON:IHG) CEO Pocket Last Year?
Keith Barr has been the CEO of InterContinental Hotels Group PLC (LON:IHG) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for InterContinental Hotels Group.
View our latest analysis for InterContinental Hotels Group
How Does Total Compensation For Keith Barr Compare With Other Companies In The Industry?
Our data indicates that InterContinental Hotels Group PLC has a market capitalization of UK£7.8b, and total annual CEO compensation was reported as UK£4.4m for the year to December 2019. That's a notable increase of 9.7% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at UK£1.1m.
For comparison, other companies in the industry with market capitalizations above UK£6.2b, reported a median total CEO compensation of UK£6.7m. This suggests that Keith Barr is paid below the industry median. Furthermore, Keith Barr directly owns UK£3.0m worth of shares in the company.
Component | 2019 | 2018 | Proportion (2019) |
Salary | UK£1.1m | UK£1.0m | 25% |
Other | UK£3.3m | UK£3.0m | 75% |
Total Compensation | UK£4.4m | UK£4.0m | 100% |
Speaking on an industry level, nearly 69% of total compensation represents salary, while the remainder of 31% is other remuneration. It's interesting to note that InterContinental Hotels Group allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
InterContinental Hotels Group PLC's Growth
Over the last three years, InterContinental Hotels Group PLC has shrunk its earnings per share by 38% per year. It saw its revenue drop 21% over the last year.
Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has InterContinental Hotels Group PLC Been A Good Investment?
InterContinental Hotels Group PLC has generated a total shareholder return of 8.1% over three years, so most shareholders wouldn't be too disappointed. But they would probably prefer not to see CEO compensation far in excess of the median.
To Conclude...
As previously discussed, Keith is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Shareholder returns have been uninspiring, but EPS growth has arguably been worse, over the last three years. We can't categorize CEO compensation as high, but shareholders might object to a raise at this stage, considering overall poor performance.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for InterContinental Hotels Group that investors should be aware of in a dynamic business environment.
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.
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. 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.
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