How Should Investors Feel About Front Yard Residential Corporation's (NYSE:RESI) CEO Pay?
George Ellison became the CEO of Front Yard Residential Corporation (NYSE:RESI) in 2015. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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.
See our latest analysis for Front Yard Residential
How Does George Ellison's Compensation Compare With Similar Sized Companies?
Our data indicates that Front Yard Residential Corporation is worth US$648m, and total annual CEO compensation was reported as US$1.8m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at . We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$400m to US$1.6b. The median total CEO compensation was US$2.5m.
Most shareholders would consider it a positive that George Ellison takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at Front Yard Residential has changed over time.
Is Front Yard Residential Corporation Growing?
Front Yard Residential Corporation has increased its earnings per share (EPS) by an average of 27% a year, over the last three years (using a line of best fit). It achieved revenue growth of 33% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. It could be important to check this free visual depiction of what analysts expect for the future.
Has Front Yard Residential Corporation Been A Good Investment?
Front Yard Residential Corporation has served shareholders reasonably well, with a total return of 25% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
It looks like Front Yard Residential Corporation pays its CEO less than similar sized companies.
Since the business is growing, many would argue this suggests the pay is modest. While some might be keen on seeing higher returns, our short analysis has not produced any evidence to suggest George Ellison is overcompensated. It's great to see a company that pays its CEO reasonably, even while growing. But for me, it's even better if insiders are also buying shares with their own cold, hard, cash. Whatever your view on compensation, you might want to check if insiders are buying or selling Front Yard Residential shares (free trial).
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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.
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