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Is MFA Financial, Inc. (NYSE:MFA) Overpaying Its CEO?

Simply Wall St

Craig Knutson has been the CEO of MFA Financial, Inc. (NYSE:MFA) since 2017. 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.

Check out our latest analysis for MFA Financial

How Does Craig Knutson's Compensation Compare With Similar Sized Companies?

Our data indicates that MFA Financial, Inc. is worth US$3.3b, and total annual CEO compensation was reported as US$5.2m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$700k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$4.9m.

That means Craig Knutson receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at MFA Financial has changed from year to year.

NYSE:MFA CEO Compensation, March 2nd 2020

Is MFA Financial, Inc. Growing?

On average over the last three years, MFA Financial, Inc. has shrunk earnings per share by 3.3% each year (measured with a line of best fit). It achieved revenue growth of 25% over the last year.

Investors should note that, over three years, earnings per share are down. On the other hand, the strong revenue growth suggests the business is growing. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. It could be important to check this free visual depiction of what analysts expect for the future.

Has MFA Financial, Inc. Been A Good Investment?

With a total shareholder return of 22% over three years, MFA Financial, Inc. shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

Remuneration for Craig Knutson is close enough to the median pay for a CEO of a similar sized company .

We think many would like to see better growth. But we don't think the CEO compensation is a problem. So you may want to check if insiders are buying MFA Financial shares with their own money (free access).

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.

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. Thank you for reading.