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Is American Equity Investment Life Holding Company (NYSE:AEL) Excessively Paying Its CEO?

Simply Wall St

In 2012 John Matovina was appointed CEO of American Equity Investment Life Holding Company (NYSE:AEL). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for American Equity Investment Life Holding

How Does John Matovina's Compensation Compare With Similar Sized Companies?

According to our data, American Equity Investment Life Holding Company has a market capitalization of US$2.3b, and pays its CEO total annual compensation worth US$3.6m. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$864k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$4.0m.

So John Matovina is paid around the average of the companies we looked at. 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 American Equity Investment Life Holding, below.

NYSE:AEL CEO Compensation, August 1st 2019

Is American Equity Investment Life Holding Company Growing?

On average over the last three years, American Equity Investment Life Holding Company has grown earnings per share (EPS) by 47% each year (using a line of best fit). Its revenue is down -22% over last year.

This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end. Shareholders might be interested in this free visualization of analyst forecasts.

Has American Equity Investment Life Holding Company Been A Good Investment?

I think that the total shareholder return of 65%, over three years, would leave most American Equity Investment Life Holding Company shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

John Matovina is paid around what is normal the leaders of comparable size companies.

The company is growing earnings per share and total shareholder returns have been pleasing. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. Whatever your view on compensation, you might want to check if insiders are buying or selling American Equity Investment Life Holding shares (free trial).

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.