Yahoo Finance Is Synchrony Financial's (NYSE:SYF) CEO Being Overpaid?
In 2014 Margaret Keane was appointed CEO of Synchrony Financial (NYSE:SYF). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for Synchrony Financial
How Does Margaret Keane's Compensation Compare With Similar Sized Companies?
Our data indicates that Synchrony Financial is worth US$23b, and total annual CEO compensation was reported as US$12m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$1.2m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
That means Margaret Keane receives fairly typical remuneration for the CEO of a large company. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at Synchrony Financial, below.
Is Synchrony Financial Growing?
Over the last three years Synchrony Financial has grown its earnings per share (EPS) by an average of 26% per year (using a line of best fit). In the last year, its revenue is up 23%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Synchrony Financial Been A Good Investment?
With a total shareholder return of 5.6% over three years, Synchrony Financial has done okay by shareholders. 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...
Margaret Keane is paid around the same as most CEOs of large companies.
We would wish for better returns (whether dividends or capital gains) but we do admire the solid EPS growth on show here. So considering these factors, we think the CEO pay is probably quite reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Synchrony Financial (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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