In 2017 Claude LeBlanc was appointed CEO of Ambac Financial Group, Inc. (NASDAQ:AMBC). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Claude LeBlanc's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Ambac Financial Group, Inc. has a market cap of US$1.0b, and reported total annual CEO compensation of US$6.2m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$900k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$2.5m.
As you can see, Claude LeBlanc is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Ambac Financial Group, Inc. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Ambac Financial Group has changed from year to year.
Is Ambac Financial Group, Inc. Growing?
Over the last three years Ambac Financial Group, Inc. has shrunk its earnings per share by an average of 41% per year (measured with a line of best fit). Its revenue is down 24% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Ambac Financial Group, Inc. Been A Good Investment?
Ambac Financial Group, Inc. has not done too badly by shareholders, with a total return of 1.4%, over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
We compared total CEO remuneration at Ambac Financial Group, Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. And while shareholder returns have been respectable, they have hardly been superb. So you may want to delve deeper, because we don't think the CEO pay is too low. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Ambac Financial Group (free visualization of insider trades).
Important note: Ambac Financial Group 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.
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.
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