Voya Financial, Inc.'s (NYSE:VOYA) CEO Compensation Is Looking A Bit Stretched At The Moment

By
Simply Wall St
Published
May 20, 2021
NYSE:VOYA
Source: Shutterstock

Performance at Voya Financial, Inc. (NYSE:VOYA) has been reasonably good and CEO Rod Martin has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 27 May 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Voya Financial

How Does Total Compensation For Rod Martin Compare With Other Companies In The Industry?

According to our data, Voya Financial, Inc. has a market capitalization of US$8.0b, and paid its CEO total annual compensation worth US$14m over the year to December 2020. We note that's an increase of 8.3% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.2m.

For comparison, other companies in the same industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$3.6m. Accordingly, our analysis reveals that Voya Financial, Inc. pays Rod Martin north of the industry median. Furthermore, Rod Martin directly owns US$24m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary US$1.2m US$1.0m 9%
Other US$12m US$12m 91%
Total CompensationUS$14m US$13m100%

Speaking on an industry level, nearly 29% of total compensation represents salary, while the remainder of 71% is other remuneration. Voya Financial pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
NYSE:VOYA CEO Compensation May 21st 2021

A Look at Voya Financial, Inc.'s Growth Numbers

Over the past three years, Voya Financial, Inc. has seen its earnings per share (EPS) grow by 75% per year. Its revenue is down 45% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Voya Financial, Inc. Been A Good Investment?

With a total shareholder return of 26% over three years, Voya Financial, Inc. shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 3 warning signs for Voya Financial (of which 2 make us uncomfortable!) that you should know about in order to have a holistic understanding of the stock.

Important note: Voya Financial is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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