Shareholders Will Most Likely Find Service Corporation International's (NYSE:SCI) CEO Compensation Acceptable

Key Insights

• Service Corporation International's Annual General Meeting to take place on 6th of May
• Salary of US$1.20m is part of CEO Tom Ryan's total remuneration
• Total compensation is similar to the industry average
• Service Corporation International's EPS declined by 9.1% over the past three years while total shareholder return over the past three years was 31%

We've discovered 1 warning sign about Service Corporation International. View them for free.

Despite Service Corporation International's (NYSE:SCI) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. Some of these issues will occupy shareholders' minds as the AGM rolls around on 6th of May. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

Check out our latest analysis for Service Corporation International

How Does Total Compensation For Tom Ryan Compare With Other Companies In The Industry?

At the time of writing, our data shows that Service Corporation International has a market capitalization of US$11b, and reported total annual CEO compensation of US$12m for the year to December 2024. That's just a smallish increase of 4.6% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.2m.

On comparing similar companies in the American Consumer Services industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$12m. This suggests that Service Corporation International remunerates its CEO largely in line with the industry average. What's more, Tom Ryan holds US$133m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	US$1.2m	US$1.2m	10%
Other	US$11m	US$10m	90%
Total Compensation	US$12m	US$11m	100%

Talking in terms of the industry, salary represented approximately 24% of total compensation out of all the companies we analyzed, while other remuneration made up 76% of the pie. Service Corporation International sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Service Corporation International's Growth Numbers

Over the last three years, Service Corporation International has shrunk its earnings per share by 9.1% per year. In the last year, its revenue is up 2.1%.

The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Service Corporation International Been A Good Investment?

With a total shareholder return of 31% over three years, Service Corporation International shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Service Corporation International that investors should think about before committing capital to this stock.

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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.