We Take A Look At Why Navient Corporation's (NASDAQ:NAVI) CEO Has Earned Their Pay Packet

We have been pretty impressed with the performance at Navient Corporation (NASDAQ:NAVI) recently and CEO Jack Remondi deserves a mention for their role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 20 May 2021. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

View our latest analysis for Navient

How Does Total Compensation For Jack Remondi Compare With Other Companies In The Industry?

Our data indicates that Navient Corporation has a market capitalization of US$3.0b, and total annual CEO compensation was reported as US$8.1m for the year to December 2020. That's a fairly small increase of 4.0% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.0m.

In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$9.8m. From this we gather that Jack Remondi is paid around the median for CEOs in the industry. Furthermore, Jack Remondi directly owns US$32m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	US$1.0m	US$1.0m	13%
Other	US$7.1m	US$6.8m	87%
Total Compensation	US$8.1m	US$7.8m	100%

Talking in terms of the industry, salary represented approximately 18% of total compensation out of all the companies we analyzed, while other remuneration made up 82% of the pie. Navient sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Navient Corporation's Growth

Over the past three years, Navient Corporation has seen its earnings per share (EPS) grow by 56% per year. It achieved revenue growth of 48% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 Navient Corporation Been A Good Investment?

We think that the total shareholder return of 38%, over three years, would leave most Navient Corporation shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 4 warning signs for Navient (2 are a bit unpleasant!) that you should be aware of before investing here.

Switching gears from Navient, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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