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Rod Martin became the CEO of Voya Financial, Inc. (NYSE:VOYA) in 2011. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Rod Martin’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Voya Financial, Inc. has a market cap of US$7.4b, and is paying total annual CEO compensation of US$11m. (This figure is for the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$1.0m. We looked at a group of companies with market capitalizations from US$4.0b to US$12b, and the median CEO compensation was US$6.4m.
Thus we can conclude that Rod Martin receives more in total compensation than the median of a group of companies in the same market, and of similar size to Voya Financial, Inc.. However, this doesn’t necessarily mean the pay is too high. 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 Voya Financial has changed from year to year.
Is Voya Financial, Inc. Growing?
On average over the last three years, Voya Financial, Inc. has shrunk earnings per share by 128% each year (measured with a line of best fit). In the last year, its revenue is up 22%.
Few shareholders would be pleased to read that earnings per share are lower over three years. There’s no doubt that the silver lining is that revenue is up. But it isn’t sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has Voya Financial, Inc. Been A Good Investment?
I think that the total shareholder return of 88%, over three years, would leave most Voya Financial, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared the total CEO remuneration paid by Voya Financial, Inc., 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.
We think many shareholders would be underwhelmed with the business growth over the last three years.
But clearly there are some positives, because investors have done well over the same time frame. Given this situation we doubt shareholders are particularly concerned about the CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling Voya Financial shares (free trial).
Important note: Voya Financial may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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.