In 2003 John Dicus was appointed CEO of Capitol Federal Financial, Inc. (NASDAQ:CFFN). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does John Dicus’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Capitol Federal Financial, Inc. has a market cap of US$1.5b, and reported total annual CEO compensation of US$1.1m for the year to September 2019. We think total compensation is more important but we note that the CEO salary is lower, at US$661k. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$4.8m.
Pay mix tells us a lot about how a company functions versus the wider industry, and it’s no different in the case of Capitol Federal Financial. On an industry level, roughly 58% of total compensation represents salary and 42% is other remuneration. Capitol Federal Financial does not set aside a larger portion of remuneration in the form of salary, maintaining the same rate as the wider market.
At first glance this seems like a real positive for shareholders, since John Dicus is paid less than the average total compensation paid by similar sized companies. Though positive, it’s important we delve into the performance of the actual business. The graphic below shows how CEO compensation at Capitol Federal Financial has changed from year to year.
Is Capitol Federal Financial, Inc. Growing?
Capitol Federal Financial, Inc. has seen earnings per share (EPS) move positively by an average of 2.8% a year, over the last three years (using a line of best fit). Revenue was pretty flat on last year.
I’m not particularly impressed by the revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. You might want to check this free visual report on analyst forecasts for future earnings.
Has Capitol Federal Financial, Inc. Been A Good Investment?
With a three year total loss of 5.2%, Capitol Federal Financial, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
It appears that Capitol Federal Financial, Inc. remunerates its CEO below most similar sized companies.
It’s well worth noting that while John Dicus is paid less than most company leaders (at similar sized companies), performance has been somewhat uninspiring, and total returns have been lacking. So while shareholders shouldn’t be overly concerned about CEO compensation, they would probably like to see improved shareholder returns before seeing a pay increase. CEO compensation is an important area to keep your eyes on, but we’ve also identified 2 warning signs for Capitol Federal Financial (1 is concerning!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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