John Matovina has been the CEO of American Equity Investment Life Holding Company (NYSE:AEL) since 2012. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 process should give us an idea about how appropriately the CEO is paid.
How Does John Matovina’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that American Equity Investment Life Holding Company has a market cap of US$2.9b, and is paying total annual CEO compensation of US$3m. Notably, that’s an increase of 87% over the year before. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$5m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at American Equity Investment Life Holding has changed from year to year.
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 11% each year. Its revenue is down -1.0% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business.
You might want to check this free visual report on analyst forecasts for future earnings.
Has American Equity Investment Life Holding Company Been A Good Investment?
American Equity Investment Life Holding Company has generated a total shareholder return of 26% over three years, so most shareholders would be reasonably content. 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.
It looks like American Equity Investment Life Holding Company pays its CEO less than similar sized companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. While returns over the last few years haven’t been top notch, there is nothing to suggest to us that John Matovina is overcompensated.
It’s good to see reasonable payment of the CEO, even while the business improves. But for me, it’s even better if insiders are also buying shares with their own cold, hard, cash. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at American Equity Investment Life Holding Company.
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
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 email@example.com.