D. Jordan became the CEO of First Horizon Corporation (NYSE:FHN) in 2008, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether First Horizon pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing First Horizon Corporation's CEO Compensation With the industry
Our data indicates that First Horizon Corporation has a market capitalization of US$7.3b, and total annual CEO compensation was reported as US$5.6m for the year to December 2019. We note that's an increase of 28% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$900k.
On examining similar-sized companies in the industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$4.9m. So it looks like First Horizon compensates D. Jordan in line with the median for the industry. Furthermore, D. Jordan directly owns US$9.8m worth of shares in the company, implying that they are deeply invested in the company's success.
Speaking on an industry level, nearly 43% of total compensation represents salary, while the remainder of 57% is other remuneration. First Horizon pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
First Horizon Corporation's Growth
Over the past three years, First Horizon Corporation has seen its earnings per share (EPS) grow by 19% per year. Its revenue is up 12% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has First Horizon Corporation Been A Good Investment?
With a three year total loss of 26% for the shareholders, First Horizon Corporation would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
As we touched on above, First Horizon Corporation is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. But on the bright side, EPS growth is positive over the same period. Considering positive EPS growth, we'd say compensation is fair, but shareholders may be wary of a bump in pay before the company logs positive returns.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for First Horizon you should be aware of, and 1 of them doesn't sit too well with us.
Important note: First Horizon is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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