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Is Ally Financial Inc.'s (NYSE:ALLY) CEO Being Overpaid?

Simply Wall St

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Jeff Brown has been the CEO of Ally Financial Inc. (NYSE:ALLY) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. 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.

View our latest analysis for Ally Financial

How Does Jeff Brown's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Ally Financial Inc. has a market cap of US$12b, and is paying total annual CEO compensation of US$9.6m. (This is based on the year to December 2018). We note that's an increase of 8.6% above last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0m. 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. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.

So Jeff Brown receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see, below, how CEO compensation at Ally Financial has changed over time.

NYSE:ALLY CEO Compensation, June 13th 2019

Is Ally Financial Inc. Growing?

Ally Financial Inc. has increased its earnings per share (EPS) by an average of 69% a year, over the last three years (using a line of best fit). Its revenue is up 4.4% over last year.

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. It could be important to check this free visual depiction of what analysts expect for the future.

Has Ally Financial Inc. Been A Good Investment?

Boasting a total shareholder return of 90% over three years, Ally Financial Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Jeff Brown is paid around what is normal the leaders of larger companies.

Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Ally 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.

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.