Craig Knutson became the CEO of MFA Financial, Inc. (NYSE:MFA) in 2017. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Craig Knutson’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that MFA Financial, Inc. has a market cap of US$3.6b, and reported total annual CEO compensation of US$5.2m for the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$700k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$4.9m.
So Craig Knutson receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at MFA Financial has changed from year to year.
Is MFA Financial, Inc. Growing?
MFA Financial, Inc. has reduced its earnings per share by an average of 4.9% a year, over the last three years (measured with a line of best fit). Its revenue is up 7.1% over last year.
Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has MFA Financial, Inc. Been A Good Investment?
I think that the total shareholder return of 37%, over three years, would leave most MFA Financial, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Craig Knutson is paid around the same as most CEOs of similar size companies.
We feel that earnings per share have been a bit disappointing, but it’s nice to see positive shareholder returns over the last three years. So we doubt many are complaining about the fairly normal CEO pay. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at MFA Financial.
Important note: MFA Financial may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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