Does JMP Group LLC’s (NYSE:JMP) CEO Pay Reflect Performance?

In 1999 Joe Jolson was appointed CEO of JMP Group LLC (NYSE:JMP). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for JMP Group

How Does Joe Jolson’s Compensation Compare With Similar Sized Companies?

Our data indicates that JMP Group LLC is worth US$104m, and total annual CEO compensation is US$3.0m. (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$250k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$295k.

As you can see, Joe Jolson is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean JMP Group LLC is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance. 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.

You can see, below, how CEO compensation at JMP Group has changed over time.

NYSE:JMP CEO Compensation November 30th 18
NYSE:JMP CEO Compensation November 30th 18

Is JMP Group LLC Growing?

JMP Group LLC has reduced its earnings per share by an average of 78% a year, over the last three years. In the last year, its revenue is up 15%.

Sadly for shareholders, earnings per share are actually down, over three years. And while it’s good to see some good revenue growth recently, the growth isn’t really fast enough for me to put aside my concerns around earnings. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.

Has JMP Group LLC Been A Good Investment?

Given the total loss of 3.1% over three years, many shareholders in JMP Group LLC are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

We examined the amount JMP Group LLC pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us.

Just as bad, share price gains for investors have failed to materialize, over the same period. Some might well form the view that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at JMP Group.

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.

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 editorial-team@simplywallst.com.