Key Insights

• Prudential Financial's Annual General Meeting to take place on 14th of May
• Total pay for CEO Charlie Lowrey includes US$1.30m salary
• The total compensation is similar to the average for the industry
• Prudential Financial's total shareholder return over the past three years was 28% while its EPS was down 4.0% over the past three years

The share price of Prudential Financial, Inc. (NYSE:PRU) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 14th of May. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

Comparing Prudential Financial, Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that Prudential Financial, Inc. has a market capitalization of US$42b, and reported total annual CEO compensation of US$19m for the year to December 2023. That's slightly lower by 4.4% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.3m.

On comparing similar companies in the American Insurance industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$15m. This suggests that Prudential Financial remunerates its CEO largely in line with the industry average. What's more, Charlie Lowrey holds US$21m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 14% of total compensation represents salary and 86% is other remuneration. It's interesting to note that Prudential Financial allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Prudential Financial, Inc.'s Growth Numbers

Prudential Financial, Inc. has reduced its earnings per share by 4.0% a year over the last three years. In the last year, its revenue is up 1.1%.

The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Prudential Financial, Inc. Been A Good Investment?

With a total shareholder return of 28% over three years, Prudential Financial, Inc. shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about whether these returns will continue. The upcoming AGM will provide shareholders the opportunity to revisit the company's remuneration policies and evaluate if the board's judgement and decision-making is aligned with that of the company's shareholders.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Prudential Financial that you should be aware of before investing.

Switching gears from Prudential Financial, 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.

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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.