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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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Jim Cracchiolo’s Compensation Compare With Similar Sized Companies?
According to our data, Ameriprise Financial, Inc. has a market capitalization of US$18b, and pays its CEO total annual compensation worth US$24m. (This is based on the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$1.0m. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO compensation was US$11m. 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. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Ameriprise Financial, below.
Is Ameriprise Financial, Inc. Growing?
Over the last three years Ameriprise Financial, Inc. has grown its earnings per share (EPS) by an average of 18% per year (using a line of best fit). It achieved revenue growth of 7.0% over the 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. It could be important to check this free visual depiction of what analysts expect for the future.
Has Ameriprise Financial, Inc. Been A Good Investment?
I think that the total shareholder return of 68%, over three years, would leave most Ameriprise Financial, Inc. shareholders smiling. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
We examined the amount Ameriprise Financial, Inc. pays its CEO, and compared it to the amount paid by other large companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. On top of that, in the same period, returns to shareholders have been great. So, considering this good performance, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying Ameriprise Financial shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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. On rare occasion, data errors may occur. Thank you for reading.