We Think Some Shareholders May Hesitate To Increase IG Group Holdings plc's (LON:IGG) CEO Compensation

·3 min read

CEO June Felix has done a decent job of delivering relatively good performance at IG Group Holdings plc (LON:IGG) recently. As shareholders go into the upcoming AGM on 22 September 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still want to keep CEO compensation within reason.

View our latest analysis for IG Group Holdings

How Does Total Compensation For June Felix Compare With Other Companies In The Industry?

According to our data, IG Group Holdings plc has a market capitalization of UK£3.6b, and paid its CEO total annual compensation worth UK£3.5m over the year to May 2021. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at UK£610k.

On comparing similar companies from the same industry with market caps ranging from UK£2.9b to UK£8.7b, we found that the median CEO total compensation was UK£2.7m. Hence, we can conclude that June Felix is remunerated higher than the industry median. Furthermore, June Felix directly owns UK£2.6m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2021

2020

Proportion (2021)

Salary

UK£610k

UK£600k

17%

Other

UK£2.9m

UK£3.0m

83%

Total Compensation

UK£3.5m

UK£3.6m

100%

On an industry level, total compensation is equally proportioned between salary and other compensation, that is, they each represent approximately 50% of the total compensation. In IG Group Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

A Look at IG Group Holdings plc's Growth Numbers

IG Group Holdings plc has seen its earnings per share (EPS) increase by 18% a year over the past three years. Its revenue is up 32% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 IG Group Holdings plc Been A Good Investment?

With a total shareholder return of 18% over three years, IG Group Holdings plc shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for IG Group Holdings that investors should look into moving forward.

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. 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.

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