We Discuss Why Brighthouse Financial, Inc.'s (NASDAQ:BHF) CEO Will Find It Hard To Get A Pay Rise From Shareholders This Year

The anaemic share price growth at Brighthouse Financial, Inc. (NASDAQ:BHF) over the past few years has probably not impressed shareholders and may be due to earnings not growing over that period. Some of these issues will occupy shareholders' minds as the AGM rolls around on 10 June 2021. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

See our latest analysis for Brighthouse Financial

Comparing Brighthouse Financial, Inc.'s CEO Compensation With the industry

Our data indicates that Brighthouse Financial, Inc. has a market capitalization of US$4.2b, and total annual CEO compensation was reported as US$8.1m for the year to December 2020. That's slightly lower by 4.2% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$920k.

On comparing similar companies from the same industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$6.7m. This suggests that Brighthouse Financial remunerates its CEO largely in line with the industry average. What's more, Eric Steigerwalt holds US$10m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	US$920k	US$897k	11%
Other	US$7.2m	US$7.6m	89%
Total Compensation	US$8.1m	US$8.5m	100%

On an industry level, around 18% of total compensation represents salary and 82% is other remuneration. It's interesting to note that Brighthouse Financial allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Brighthouse Financial, Inc.'s Growth

Over the last three years, Brighthouse Financial, Inc. has shrunk its earnings per share by 53% per year. In the last year, its revenue is down 97%.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Brighthouse Financial, Inc. Been A Good Investment?

Brighthouse Financial, Inc. has generated a total shareholder return of 4.0% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

To Conclude...

The flat share price growth combined with the the fact that earnings have failed to grow makes us wonder whether the share price will have any further strong momentum. 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.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Brighthouse Financial that you should be aware of before investing.

Important note: Brighthouse 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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This article by Simply Wall St is general in nature. 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.
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