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In 2014 Phil Falcone was appointed CEO of HC2 Holdings, Inc. (NYSE:HCHC). 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 method should give us information to assess how appropriately the company pays the CEO.
How Does Phil Falcone's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that HC2 Holdings, Inc. has a market cap of US$107m, and is paying total annual CEO compensation of US$12m. (This number is for the twelve months until December 2018). Notably, that's an increase of 42% over the year before. We think total compensation is more important but we note that the CEO salary is lower, at US$600k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$452k.
Thus we can conclude that Phil Falcone receives more in total compensation than the median of a group of companies in the same market, and of similar size to HC2 Holdings, Inc.. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at HC2 Holdings has changed from year to year.
Is HC2 Holdings, Inc. Growing?
HC2 Holdings, Inc. has increased its earnings per share (EPS) by an average of 90% a year, over the last three years (using a line of best fit). It achieved revenue growth of 19% over the 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 HC2 Holdings, Inc. Been A Good Investment?
Given the total loss of 47% over three years, many shareholders in HC2 Holdings, Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared the total CEO remuneration paid by HC2 Holdings, Inc., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. However, the returns to investors are far less impressive, over the same period. So shareholders might not feel great about the fact that CEO pay increased on last year. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling HC2 Holdings (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 firstname.lastname@example.org. 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.