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Is Synchrony Financial's (NYSE:SYF) CEO Overpaid Relative To Its Peers?

Simply Wall St

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Margaret Keane became the CEO of Synchrony Financial (NYSE:SYF) in 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. 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 process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Synchrony Financial

How Does Margaret Keane's Compensation Compare With Similar Sized Companies?

According to our data, Synchrony Financial has a market capitalization of US$24b, and pays its CEO total annual compensation worth US$12m. (This is based on the year to December 2018). That's less than last year. We think total compensation is more important but we note that the CEO salary is lower, at US$1.2m. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$12m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

That means Margaret Keane receives fairly typical remuneration for the CEO of a large company. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see, below, how CEO compensation at Synchrony Financial has changed over time.

NYSE:SYF CEO Compensation, May 31st 2019

Is Synchrony Financial Growing?

On average over the last three years, Synchrony Financial has grown earnings per share (EPS) by 14% each year (using a line of best fit). It achieved revenue growth of 17% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. You might want to check this free visual report on analyst forecasts for future earnings.

Has Synchrony Financial Been A Good Investment?

With a total shareholder return of 19% over three years, Synchrony Financial 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...

Remuneration for Margaret Keane is close enough to the median pay for a CEO of a large company .

Shareholder returns could be better but shareholders would be pleased with the positive EPS growth. As a result of these considerations, I would suggest the CEO pay is reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Synchrony Financial shares (free trial).

Important note: Synchrony Financial may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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.