Is Oritani Financial Corp.’s (NASDAQ:ORIT) CEO Paid Enough Relative To Peers?

Kevin Lynch has been the CEO of Oritani Financial Corp. (NASDAQ:ORIT) since 1998. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Oritani Financial

How Does Kevin Lynch’s Compensation Compare With Similar Sized Companies?

Our data indicates that Oritani Financial Corp. is worth US$771m, and total annual CEO compensation is US$1.7m. (This number is for the twelve months until June 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$744k. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO compensation of that group was US$2.2m.

That means Kevin Lynch receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

You can see a visual representation of the CEO compensation at Oritani Financial, below.

NasdaqGS:ORIT CEO Compensation, February 27th 2019
NasdaqGS:ORIT CEO Compensation, February 27th 2019

Is Oritani Financial Corp. Growing?

Over the last three years Oritani Financial Corp. has shrunk its earnings per share by an average of 11% per year (measured with a line of best fit). It saw its revenue drop -14% over the last year.

Sadly for shareholders, earnings per share are actually down, over three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.

Has Oritani Financial Corp. Been A Good Investment?

Oritani Financial Corp. has generated a total shareholder return of 31% over three years, so most shareholders would be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.

In Summary…

Kevin Lynch is paid around what is normal the leaders of comparable size companies.

The company isn’t growing earnings per share, and nor have the total returns inspired us. We wouldn’t say the CEO pay is too high, but we’d venture the company should look to improve its business metrics (and share price) before paying any more. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Oritani Financial.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.