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What Can We Make Of FTI Consulting's (NYSE:FCN) CEO Compensation?

Simply Wall St

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Steve Gunby became the CEO of FTI Consulting, Inc. (NYSE:FCN) in 2014, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for FTI Consulting.

See our latest analysis for FTI Consulting

How Does Total Compensation For Steve Gunby Compare With Other Companies In The Industry?

At the time of writing, our data shows that FTI Consulting, Inc. has a market capitalization of US$4.1b, and reported total annual CEO compensation of US$7.3m for the year to December 2019. We note that's an increase of 18% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.0m.

On examining similar-sized companies in the industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$6.9m. So it looks like FTI Consulting compensates Steve Gunby in line with the median for the industry. What's more, Steve Gunby holds US$43m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component 2019 2018 Proportion (2019)
Salary US$1.0m US$1.0m 14%
Other US$6.3m US$5.1m 86%
Total Compensation US$7.3m US$6.1m 100%

Talking in terms of the industry, salary represented approximately 20% of total compensation out of all the companies we analyzed, while other remuneration made up 80% of the pie. FTI Consulting pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.


A Look at FTI Consulting, Inc.'s Growth Numbers

FTI Consulting, Inc.'s earnings per share (EPS) grew 50% per year over the last three years. In the last year, its revenue is up 16%.

Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has FTI Consulting, Inc. Been A Good Investment?

Boasting a total shareholder return of 241% over three years, FTI Consulting, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

As previously discussed, Steve is compensated close to the median for companies of its size, and which belong to the same industry. The company is growing earnings per share and total shareholder returns have been pleasing. So one could argue that CEO compensation is quite modest, if you consider company performance! Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for FTI Consulting that investors should look into moving forward.

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.

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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