In 2003, John Dicus was appointed CEO of Capitol Federal Financial, Inc. (NASDAQ:CFFN). First, this article will compare CEO compensation with compensation at similar sized companies. 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.
How Does John Dicus's Compensation Compare With Similar Sized Companies?
According to our data, Capitol Federal Financial, Inc. has a market capitalization of US$1.6b, and paid its CEO total annual compensation worth US$1.1m over the year to September 2019. We think total compensation is more important but we note that the CEO salary is lower, at US$661k. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$4.8m.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Capitol Federal Financial stands. Speaking on an industry level, we can see that nearly 59% of total compensation represents salary, while the remainder of 41% is other remuneration. Capitol Federal Financial is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance. You can see, below, how CEO compensation at Capitol Federal Financial has changed over time.
Is Capitol Federal Financial, Inc. Growing?
Capitol Federal Financial, Inc. has seen earnings per share (EPS) move positively by an average of 2.8% a year, over the last three years (using a line of best fit). Revenue was pretty flat on last year.
I'm not particularly impressed by the revenue growth, but it is good to see modest EPS growth. Considering these factors I'd say performance has been pretty decent, though not amazing. Shareholders might be interested in this free visualization of analyst forecasts.
Has Capitol Federal Financial, Inc. Been A Good Investment?
With a three year total loss of 2.6%, Capitol Federal Financial, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
It looks like Capitol Federal Financial, Inc. pays its CEO less than similar sized companies.
It's well worth noting that while John Dicus is paid less than most company leaders (at similar sized companies), performance has been somewhat uninspiring, and total returns have been lacking. Many shareholders would probably like to see improvements, but our analysis does not suggest that CEO compensation is too generous. On another note, Capitol Federal Financial has 2 warning signs (and 1 which is potentially serious) we think you should know about.
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.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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