Rick Thornberry has been the CEO of Radian Group Inc. (NYSE:RDN) since 2017. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Rick Thornberry's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Radian Group Inc. has a market cap of US$5.1b, and reported total annual CEO compensation of US$9.5m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$800k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$6.8m.
As you can see, Rick Thornberry is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Radian Group Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Radian Group has changed from year to year.
Is Radian Group Inc. Growing?
Radian Group Inc. has increased its earnings per share (EPS) by an average of 40% a year, over the last three years (using a line of best fit). Its revenue is up 17% over last year.
This demonstrates that the company has been improving recently. A good result. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Radian Group Inc. Been A Good Investment?
Boasting a total shareholder return of 84% over three years, Radian Group Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
We compared total CEO remuneration at Radian Group Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Shareholders may want to check for free if Radian Group insiders are buying or selling shares.
If you want to buy a stock that is better than Radian Group, this free list of high return, low debt companies is a great place to look.
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 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. Thank you for reading.