Jim Cracchiolo became the CEO of Ameriprise Financial Inc (NYSE:AMP) in 2005. This analysis aims first to contrast CEO compensation with other large companies. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Jim Cracchiolo’s Compensation Compare With Similar Sized Companies?
Our data indicates that Ameriprise Financial Inc is worth US$17.7b, and total annual CEO compensation is US$24m. We note that’s an increase of 44% above last year. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO compensation was US$11m.
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.
The graphic below shows how CEO compensation at Ameriprise Financial has changed from year to year.
Is Ameriprise Financial Inc Growing?
On average over the last three years, Ameriprise Financial Inc has grown earnings per share (EPS) by 13% each year. In the last year, its revenue is up 6.5%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s also good to see modest revenue growth, suggesting the underlying business is healthy. So this free visualization of the analyst consensus on future earnings could help you make the right decision about whether to buy, sell, or hold.
Has Ameriprise Financial Inc Been A Good Investment?
With a total shareholder return of 15% over three years, Ameriprise Financial Inc shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
We examined the amount Ameriprise Financial Inc pays its CEO, and compared it to the amount paid by other large companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Looking at the same time period, we think that the shareholder returns are respectable. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we’d recommend further research on management. High CEO remuneration is not great, but it certainly doesn’t mean a stock will perform poorly. Nonetheless, it could be useful to double-check if insiders have sold shares recently.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.