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Does Capitol Federal Financial, Inc.'s (NASDAQ:CFFN) CEO Salary Reflect Performance?

Simply Wall St

John Dicus became the CEO of Capitol Federal Financial, Inc. (NASDAQ:CFFN) in 2003. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Capitol Federal Financial

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

Our data indicates that Capitol Federal Financial, Inc. is worth US$2.0b, and total annual CEO compensation was reported as US$1.1m for the year to September 2018. While we always look at total compensation first, we note that the salary component is less, at US$648k. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO total compensation was US$4.1m.

Most shareholders would consider it a positive that John Dicus takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

You can see a visual representation of the CEO compensation at Capitol Federal Financial, below.

NasdaqGS:CFFN CEO Compensation, October 28th 2019
NasdaqGS:CFFN CEO Compensation, October 28th 2019

Is Capitol Federal Financial, Inc. Growing?

On average over the last three years, Capitol Federal Financial, Inc. has grown earnings per share (EPS) by 4.9% each year (using a line of best fit). In the last year, its revenue is up 3.5%.

I'd prefer higher revenue growth, but I'm happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Capitol Federal Financial, Inc. Been A Good Investment?

Capitol Federal Financial, Inc. has generated a total shareholder return of 19% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

It looks like Capitol Federal Financial, Inc. pays its CEO less than similar sized companies.

John Dicus receives relatively low remuneration compared to similar sized companies. But the company isn't exactly firing on all cylinders, from my perspective. But on this analysis I see no issue with the CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling Capitol Federal Financial shares (free trial).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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.