Shareholders Will Probably Hold Off On Increasing Stifel Financial Corp.'s (NYSE:SF) CEO Compensation For The Time Being

Key Insights

• Stifel Financial will host its Annual General Meeting on 5th of June
• CEO Ron Kruszewski's total compensation includes salary of US$200.0k
• The total compensation is 64% higher than the average for the industry
• Stifel Financial's EPS declined by 3.0% over the past three years while total shareholder return over the past three years was 21%

Despite Stifel Financial Corp.'s (NYSE:SF) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. The upcoming AGM on 5th of June may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

See our latest analysis for Stifel Financial

How Does Total Compensation For Ron Kruszewski Compare With Other Companies In The Industry?

Our data indicates that Stifel Financial Corp. has a market capitalization of US$8.2b, and total annual CEO compensation was reported as US$13m for the year to December 2023. That's a fairly small increase of 3.2% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$200k.

For comparison, other companies in the American Capital Markets industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$8.1m. Accordingly, our analysis reveals that Stifel Financial Corp. pays Ron Kruszewski north of the industry median. Moreover, Ron Kruszewski also holds US$106m worth of Stifel Financial stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$200k	US$200k	2%
Other	US$13m	US$13m	98%
Total Compensation	US$13m	US$13m	100%

Speaking on an industry level, nearly 10% of total compensation represents salary, while the remainder of 90% is other remuneration. Interestingly, the company has chosen to go down an unconventional route in that it pays a smaller salary to Ron Kruszewski as compared to non-salary compensation over the one-year period examined. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Stifel Financial Corp.'s Growth Numbers

Stifel Financial Corp. has reduced its earnings per share by 3.0% a year over the last three years. The trailing twelve months of revenue was pretty much the same as the prior period.

Overall this is not a very positive result for shareholders. And the flat revenue hardly impresses. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Stifel Financial Corp. Been A Good Investment?

With a total shareholder return of 21% over three years, Stifel Financial Corp. shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

Stifel Financial primarily uses non-salary benefits to reward its CEO. While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Stifel Financial that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.