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This article will reflect on the compensation paid to Mike Corbat who has served as CEO of Citigroup Inc. (NYSE:C) since 2012. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Citigroup.
How Does Total Compensation For Mike Corbat Compare With Other Companies In The Industry?
According to our data, Citigroup Inc. has a market capitalization of US$110b, and paid its CEO total annual compensation worth US$26m over the year to December 2019. That's a fairly small increase of 5.5% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.5m.
On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$13m. Accordingly, our analysis reveals that Citigroup Inc. pays Mike Corbat north of the industry median. Furthermore, Mike Corbat directly owns US$20m worth of shares in the company, implying that they are deeply invested in the company's success.
Speaking on an industry level, nearly 43% of total compensation represents salary, while the remainder of 57% is other remuneration. In Citigroup's case, non-salary compensation represents a greater slice of total remuneration, 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.
A Look at Citigroup Inc.'s Growth Numbers
Citigroup Inc. has seen its earnings per share (EPS) increase by 14% a year over the past three years. Its revenue is down 2.1% over the previous year.
Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Citigroup Inc. Been A Good Investment?
Since shareholders would have lost about 15% over three years, some Citigroup Inc. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As previously discussed, Mike is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, the earnings per share growth is certainly impressive, but shareholder returns — over the same period — have been disappointing. Considering overall performance, we can't say Mike is underpaid, in fact compensation is definitely on the higher side.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for Citigroup that investors should look into moving forward.
Switching gears from Citigroup, 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.
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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