Jim Cracchiolo became the CEO of Ameriprise Financial, Inc. (NYSE:AMP) in 2005. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
How Does Jim Cracchiolo’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Ameriprise Financial, Inc. has a market cap of US$19b, and is paying total annual CEO compensation of US$26m. (This number is for the twelve months until December 2018). That’s a fairly small increase of 7.7% on year before. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.0m. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$12m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
Thus we can conclude that Jim Cracchiolo receives more in total compensation than the median of a group of large companies in the same market as Ameriprise Financial, Inc.. 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.
You can see, below, how CEO compensation at Ameriprise Financial has changed over time.
Is Ameriprise Financial, Inc. Growing?
On average over the last three years, Ameriprise Financial, Inc. has grown earnings per share (EPS) by 20% each year (using a line of best fit). Its revenue is up 3.7% over last year.
This demonstrates that the company has been improving recently. A good result. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.
Has Ameriprise Financial, Inc. Been A Good Investment?
Boasting a total shareholder return of 60% over three years, Ameriprise Financial, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared total CEO remuneration at Ameriprise Financial, Inc. with the amount paid at other large companies. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Ameriprise Financial.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.