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Is AGNC Investment Corp.'s (NASDAQ:AGNC) CEO Being Overpaid?

Simply Wall St

Gary Kain has been the CEO of AGNC Investment Corp. (NASDAQ:AGNC) since 2016. This analysis aims first to contrast CEO compensation with other large companies. Next, we'll consider growth that the business demonstrates. 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.

Check out our latest analysis for AGNC Investment

How Does Gary Kain's Compensation Compare With Similar Sized Companies?

Our data indicates that AGNC Investment Corp. is worth US$9.8b, and total annual CEO compensation is US$15m. (This figure is for the year to December 2018). That's below the compensation, last year. While we always look at total compensation first, we note that the salary component is less, at US$1.8m. We looked at a group of companies with market capitalizations over US$8.0b and the 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.

As you can see, Gary Kain is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean AGNC Investment Corp. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see, below, how CEO compensation at AGNC Investment has changed over time.

NasdaqGS:AGNC CEO Compensation, April 15th 2019

Is AGNC Investment Corp. Growing?

On average over the last three years, AGNC Investment Corp. has grown earnings per share (EPS) by 46% each year (using a line of best fit). In the last year, its revenue is down -73%.

This shows that the company has improved itself over the last few years. Good news for shareholders. While it would be good to see revenue growth, profits matter more in the end. You might want to check this free visual report on analyst forecasts for future earnings.

Has AGNC Investment Corp. Been A Good Investment?

Boasting a total shareholder return of 36% over three years, AGNC Investment 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.

In Summary...

We compared total CEO remuneration at AGNC Investment Corp. with the amount paid at other large companies. We found that it pays well over the median amount paid in the benchmark group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. Shareholders may want to check for free if AGNC Investment insiders are buying or selling shares.

Important note: AGNC Investment may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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. Thank you for reading.