Our Take On State Auto Financial Corporation's (NASDAQ:STFC) CEO Salary
Mike LaRocco became the CEO of State Auto Financial Corporation (NASDAQ:STFC) in 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
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See our latest analysis for State Auto Financial
How Does Mike LaRocco's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that State Auto Financial Corporation has a market cap of US$1.5b, and is paying total annual CEO compensation of US$6.2m. (This figure is for the year to December 2018). Notably, that's an increase of 210% over the year before. While we always look at total compensation first, we note that the salary component is less, at US$1.0m. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$4.1m.
It would therefore appear that State Auto Financial Corporation pays Mike LaRocco 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 State Auto Financial has changed over time.
Is State Auto Financial Corporation Growing?
Over the last three years State Auto Financial Corporation has grown its earnings per share (EPS) by an average of 17% per year (using a line of best fit). In the last year, its revenue is down -5.8%.
This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. You might want to check this free visual report on analyst forecasts for future earnings.
Has State Auto Financial Corporation Been A Good Investment?
Boasting a total shareholder return of 75% over three years, State Auto Financial Corporation has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
We compared total CEO remuneration at State Auto Financial Corporation with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying State Auto 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.
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.
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. Thank you for reading.
