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In 2016 Ellen Alemany was appointed CEO of CIT Group Inc. (NYSE:CIT). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Ellen Alemany’s Compensation Compare With Similar Sized Companies?
According to our data, CIT Group Inc. has a market capitalization of US$4.7b, and pays its CEO total annual compensation worth US$9.0m. (This number is for the twelve months until December 2018). That’s a notable increase of 22% on last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.0m. 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$5.3m.
Thus we can conclude that Ellen Alemany receives more in total compensation than the median of a group of companies in the same market, and of similar size to CIT Group Inc.. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at CIT Group has changed over time.
Is CIT Group Inc. Growing?
Over the last three years CIT Group Inc. has grown its earnings per share (EPS) by an average of 36% per year (using a line of best fit). Its revenue is down -3.1% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business. It could be important to check this free visual depiction of what analysts expect for the future.
Has CIT Group Inc. Been A Good Investment?
I think that the total shareholder return of 53%, over three years, would leave most CIT Group Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
We compared the total CEO remuneration paid by CIT Group Inc., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. So you may want to check if insiders are buying CIT Group shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 firstname.lastname@example.org. 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.