Yahoo Finance Here's Why It's Unlikely That T. Rowe Price Group, Inc.'s (NASDAQ:TROW) CEO Will See A Pay Rise This Year
Key Insights
T. Rowe Price Group to hold its Annual General Meeting on 7th of May
CEO Rob Sharps' total compensation includes salary of US$350.0k
Total compensation is similar to the industry average
T. Rowe Price Group's three-year loss to shareholders was 31% while its EPS was down 11% over the past three years
Shareholders will probably not be too impressed with the underwhelming results at T. Rowe Price Group, Inc. (NASDAQ:TROW) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 7th of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.
View our latest analysis for T. Rowe Price Group
Comparing T. Rowe Price Group, Inc.'s CEO Compensation With The Industry
At the time of writing, our data shows that T. Rowe Price Group, Inc. has a market capitalization of US$24b, and reported total annual CEO compensation of US$13m for the year to December 2023. That's slightly lower by 7.2% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$350k.
In comparison with other companies in the American Capital Markets industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$17m. So it looks like T. Rowe Price Group compensates Rob Sharps in line with the median for the industry. Moreover, Rob Sharps also holds US$48m worth of T. Rowe Price Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$350k | US$350k | 3% |
Other | US$12m | US$13m | 97% |
Total Compensation | US$13m | US$14m | 100% |
On an industry level, around 10% of total compensation represents salary and 90% is other remuneration. T. Rowe Price Group has chosen to walk a path less trodden, opting to compensate its CEO with less of a traditional salary and more non-salary rewards over the last year. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
T. Rowe Price Group, Inc.'s Growth
T. Rowe Price Group, Inc. has reduced its earnings per share by 11% a year over the last three years. It achieved revenue growth of 8.3% over the last year.
Few shareholders would be pleased to read that EPS have declined. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has T. Rowe Price Group, Inc. Been A Good Investment?
The return of -31% over three years would not have pleased T. Rowe Price Group, Inc. shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
T. Rowe Price Group primarily uses non-salary benefits to reward its CEO. Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for T. Rowe Price Group (1 shouldn't be ignored!) that you should be aware of before investing here.
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.
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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.