D. Jordan became the CEO of First Horizon National Corporation (NYSE:FHN) in 2008. 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 – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
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How Does D. Jordan’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that First Horizon National Corporation has a market cap of US$4.6b, and is paying total annual CEO compensation of US$10m. (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$875k. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO compensation was US$4.9m.
Thus we can conclude that D. Jordan receives more in total compensation than the median of a group of companies in the same market, and of similar size to First Horizon National Corporation. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at First Horizon National has changed from year to year.
Is First Horizon National Corporation Growing?
Over the last three years First Horizon National Corporation has grown its earnings per share (EPS) by an average of 19% per year (using a line of best fit). Its revenue is up 44% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see.
You might want to check this free visual report on analyst forecasts for future earnings.
Has First Horizon National Corporation Been A Good Investment?
First Horizon National Corporation has generated a total shareholder return of 28% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
We examined the amount First Horizon National Corporation pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. Looking at the same time period, we think that the shareholder returns are respectable. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn’t call the CEO pay problematic. So you may want to check if insiders are buying First Horizon National shares with their own money (free access).
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
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.