We have been pretty impressed with the performance at Stifel Financial Corp. (NYSE:SF) recently and CEO Ron Kruszewski deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 26 May 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.
How Does Total Compensation For Ron Kruszewski Compare With Other Companies In The Industry?
At the time of writing, our data shows that Stifel Financial Corp. has a market capitalization of US$7.1b, and reported total annual CEO compensation of US$11m for the year to December 2020. Notably, that's an increase of 31% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$200k.
In comparison with other companies in the industry with market capitalizations ranging from US$4.0b to US$12b, the reported median CEO total compensation was US$8.3m. From this we gather that Ron Kruszewski is paid around the median for CEOs in the industry. What's more, Ron Kruszewski holds US$85m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 14% of total compensation represents salary, while the remainder of 86% is other remuneration. Stifel Financial has chosen to walk a path less trodden, opting to compensate its CEO with less of a traditional salary and more non-salary rewards over the last year. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Stifel Financial Corp.'s Growth
Stifel Financial Corp. has seen its earnings per share (EPS) increase by 41% a year over the past three years. Its revenue is up 15% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Stifel Financial Corp. Been A Good Investment?
Boasting a total shareholder return of 73% over three years, Stifel Financial Corp. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Stifel Financial primarily uses non-salary benefits to reward its CEO. Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 1 which is potentially serious) in Stifel Financial we think you should know about.
Switching gears from Stifel Financial, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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