Should You Be Pleased About The CEO Pay At Donnelley Financial Solutions, Inc.'s (NYSE:DFIN)
Dan Leib became the CEO of Donnelley Financial Solutions, Inc. (NYSE:DFIN) in 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for Donnelley Financial Solutions
How Does Dan Leib's Compensation Compare With Similar Sized Companies?
Our data indicates that Donnelley Financial Solutions, Inc. is worth US$199m, and total annual CEO compensation was reported as US$4.3m for the year to December 2019. That's below the compensation, last year. We think total compensation is more important but we note that the CEO salary is lower, at US$733k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$100m to US$400m. The median total CEO compensation was US$1.4m.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Donnelley Financial Solutions. On an industry level, roughly 12% of total compensation represents salary and 88% is other remuneration. According to our research, Donnelley Financial Solutions has allocated a higher percentage of pay to salary in comparison to the broader sector.
It would therefore appear that Donnelley Financial Solutions, Inc. pays Dan Leib more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance. You can see, below, how CEO compensation at Donnelley Financial Solutions has changed over time.
Is Donnelley Financial Solutions, Inc. Growing?
Over the last three years Donnelley Financial Solutions, Inc. has seen earnings per share (EPS) move in a positive direction by an average of 4.1% per year (using a line of best fit). It saw its revenue drop 9.2% over the last year.
I would argue that the lack of revenue growth in the last year is less than ideal, but the improvement in EPS is good. 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 Donnelley Financial Solutions, Inc. Been A Good Investment?
With a three year total loss of 73%, Donnelley Financial Solutions, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
We compared the total CEO remuneration paid by Donnelley Financial Solutions, 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.
Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Although we'd stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. Taking a breather from CEO compensation, we've spotted 5 warning signs for Donnelley Financial Solutions (of which 2 are concerning!) you should know about in order to have a holistic understanding of the stock.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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