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A Quick Analysis On Raymond James Financial's (NYSE:RJF) CEO Compensation

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Simply Wall St
·4 min read
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Paul Reilly became the CEO of Raymond James Financial, Inc. (NYSE:RJF) in 2010, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Raymond James Financial.

See our latest analysis for Raymond James Financial

How Does Total Compensation For Paul Reilly Compare With Other Companies In The Industry?

According to our data, Raymond James Financial, Inc. has a market capitalization of US$16b, and paid its CEO total annual compensation worth US$12m over the year to September 2020. We note that's a small decrease of 4.9% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$500k.

In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$12m. From this we gather that Paul Reilly is paid around the median for CEOs in the industry. Furthermore, Paul Reilly directly owns US$8.9m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2020

2019

Proportion (2020)

Salary

US$500k

US$500k

4%

Other

US$12m

US$13m

96%

Total Compensation

US$12m

US$13m

100%

Speaking on an industry level, nearly 13% of total compensation represents salary, while the remainder of 87% is other remuneration. Raymond James Financial has chosen to walk a path less trodden, opting to compensate its CEO with less of a traditional salary and more non-salary rewards over the last year. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

Raymond James Financial, Inc.'s Growth

Raymond James Financial, Inc.'s earnings per share (EPS) grew 14% per year over the last three years. In the last year, its revenue is up 1.8%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Raymond James Financial, Inc. Been A Good Investment?

With a total shareholder return of 30% over three years, Raymond James Financial, Inc. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Raymond James Financial prefers rewarding its CEO through non-salary benefits. As we touched on above, Raymond James Financial, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But EPS growth over the last three years has been impressive, although the same cannot be said for shareholder returns. As a result of these considerations, we would suggest the compensation is reasonable, but looking ahead shareholders will likely want to see healthier returns.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Raymond James Financial that you should be aware of before investing.

Switching gears from Raymond James Financial, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.