D. Jordan has been the CEO of First Horizon National Corporation (NYSE:FHN) since 2008. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does D. Jordan’s Compensation Compare With Similar Sized Companies?
Our data indicates that First Horizon National Corporation is worth US$5.1b, and total annual CEO compensation was reported as US$4.3m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$897k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from US$4.0b to US$12b, and the median CEO total compensation was US$6.4m.
A first glance this seems like a real positive for shareholders, since D. Jordan is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
You can see, below, how CEO compensation at First Horizon National has changed over time.
Is First Horizon National Corporation Growing?
On average over the last three years, First Horizon National Corporation has grown earnings per share (EPS) by 21% each year (using a line of best fit). In the last year, its revenue is down 5.9%.
This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end. Shareholders might be interested in this free visualization of analyst forecasts.
Has First Horizon National Corporation Been A Good Investment?
Since shareholders would have lost about 12% over three years, some First Horizon National Corporation shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
It looks like First Horizon National Corporation pays its CEO less than similar sized companies.
Many would consider this to indicate that the pay is modest since the business is growing. Few would deny that the total shareholder return over the last three years could have been a lot better. So while we would not say that D. Jordan is generously paid, it would be good to see an improvement in business performance before too an increase in pay. In this case we may want to look deeper into the company. There are some real positives and we could see improved returns in the longer term. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling First Horizon National (free visualization of insider trades).
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.
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