Ellen Alemany became the CEO of CIT Group Inc. (NYSE:CIT) in 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. 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.
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How Does Ellen Alemany’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that CIT Group Inc. has a market cap of US$4.7b, and is paying total annual CEO compensation of US$7.4m. (This is based on the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$983k. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO compensation was US$4.9m.
It would therefore appear that CIT Group Inc. pays Ellen Alemany more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. So this free report on the analyst consensus forecasts could help you make a master move on this stock.
You can see a visual representation of the CEO compensation at CIT Group, below.
Is CIT Group Inc. Growing?
CIT Group Inc. has reduced its earnings per share by an average of 43% a year, over the last three years. It achieved revenue growth of 13% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. There’s no doubt that the silver lining is that revenue is up. But it isn’t sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.
Has CIT Group Inc. Been A Good Investment?
Boasting a total shareholder return of 54% over three years, CIT Group Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared the total CEO remuneration paid by CIT Group Inc., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.Earnings per share have not grown in three years, and the revenue growth fails to impress us.
But clearly there are some positives, because investors have done well over the same time frame. Considering this, shareholders are probably not too worried about the CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at CIT Group.
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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.