Is Service Corporation International’s (NYSE:SCI) CEO Overpaid Relative To Its Peers?
In 2005 Tom Ryan was appointed CEO of Service Corporation International (NYSE:SCI). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for Service International
How Does Tom Ryan’s Compensation Compare With Similar Sized Companies?
According to our data, Service Corporation International has a market capitalization of US$7.7b, and pays its CEO total annual compensation worth US$11m. That’s a fairly small increase of 6.9% on year before. When we examined a selection of companies with market caps ranging from US$4.0b to US$12.0b, we found the median CEO compensation was US$7m.
It would therefore appear that Service Corporation International pays Tom Ryan 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. 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 Service International has changed over time.
Is Service Corporation International Growing?
On average over the last three years, Service Corporation International has grown earnings per share (EPS) by 38% each year. In the last year, its revenue is up 1.7%.
This demonstrates that the company has been improving recently. A good result. It’s also good to see modest revenue growth, suggesting the underlying business is healthy.
You might want to check this free visual report on analyst forecasts for future earnings.
Has Service Corporation International Been A Good Investment?
Boasting a total shareholder return of 53% over three years, Service Corporation International 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…
We compared the total CEO remuneration paid by Service Corporation International, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. On top of that, in the same period, returns to shareholders have been great. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Service Corporation International.
Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
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.