How Much Did InterContinental Hotels Group's (LON:IHG) CEO Pocket Last Year?
Keith Barr has been CEO of InterContinental Hotels Group PLC (LON: IHG) since 2017. This article examines executive compensation in terms of overall company performance. This analysis also examines whether the CEO is being adequately paid, given recent earnings growth and investor returns for the InterContinental Hotels Group.
Check out our latest analysis for the InterContinental Hotels Group
How does Keith Barr total compensation compare to other companies in the industry?
Our data shows that InterContinental Hotels Group PLC has a market capitalization of £ 7.8 billion and the total annual CEO compensation for the year ended December 2019 was £ 4.4 million. This is a remarkable 9.7% increase over the previous year. While this analysis focuses on total compensation, it should be recognized that the salary component is lower at £ 1.1m in the UK.
For comparison, other companies in the industry with market capitalizations over £ 6.2 billion reported an average total CEO compensation of £ 6.7 million. This suggests Keith Barr is getting paid below the industry median. In addition, Keith Barr directly owns £ 3.0 million shares in the company in the UK.
UK £ 1.1m
UK £ 1.0m
UK £ 3.3m
UK £ 3.0m
UK £ 4.4m
UK £ 4.0m
At the industry level, nearly 69% of total compensation is salary, while the remainder of 31% is other compensation. It is interesting to note that the InterContinental Hotels Group provides a smaller portion of the compensation for salary compared to the broader industry. It is important to note that a propensity for no salary compensation suggests that total compensation is tied to company performance.
InterContinental Hotels Group PLC grows
For the past three years, InterContinental Hotels Group PLC has reduced earnings per share by 38% per year. Revenue fell 21% last year.
Few shareholders would be happy to read that EPS has declined. In addition, sales actually fell compared to the previous year. It's hard to say the company is shooting at all cylinders, so shareholders may be averse to high compensation for the CEO. Historical performance can sometimes be a good indicator of what's coming next. However, if you want a glimpse into the future of the company, this free analyst forecast visualization might interest you.
Was InterContinental Hotels Group PLC a good investment?
InterContinental Hotels Group PLC has achieved a shareholder return of 8.1% over three years so most shareholders would not be too disappointed. But they'd probably prefer not to see CEO compensation well above the median.
As previously mentioned, Keith is paid less than is usual for CEOs of similar size companies in the same industry. Shareholder returns have been uninspiring, but EPS growth has arguably been worse over the past three years. We can't rate the CEO's compensation as high, but shareholders might oppose an increase at this time as the overall performance is poor.
While CEO compensation is an important factor, there are other areas that you should also be aware of. We have identified a warning sign for InterContinental Hotels Group that investors should look out for in a dynamic business environment.
The quality of the business arguably is far more important than the CEO's compensation. So check out this free list of interesting companies that have high return on equity and low debt.
This article from Simply Wall St is of a general nature. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. We want to provide you with a long-term, focused analysis based on fundamental data. Note that our analysis may not take into account the latest price sensitive company announcements or quality materials. Simply Wall St has no position in the stocks mentioned.
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