In 2015 Rick McKenney was appointed CEO of Unum Group (NYSE:UNM). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
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How Does Rick McKenney's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Unum Group has a market cap of US$7.4b, and is paying total annual CEO compensation of US$9.7m. (This figure is for the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$1.0m. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO compensation was US$6.4m.
It would therefore appear that Unum Group pays Rick McKenney more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance. So this freevisual report on analyst forecasts could hold they key to an excellent investment decision.
You can see a visual representation of the CEO compensation at Unum Group, below.
Is Unum Group Growing?
On average over the last three years, Unum Group has grown earnings per share (EPS) by 12% each year (using a line of best fit). In the last year, its revenue is up 2.8%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably.
Has Unum Group Been A Good Investment?
Unum Group has generated a total shareholder return of 31% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
We compared total CEO remuneration at Unum Group with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. We also note that, over the same time frame, shareholder returns haven't been bad. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Unum Group (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this freelist of interesting companies.
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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.
Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.