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Is Two Harbors Investment Corp.'s (NYSE:TWO) CEO Paid Enough Relative To Peers?

Simply Wall St

Tom Siering became the CEO of Two Harbors Investment Corp. (NYSE:TWO) in 2009. 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Two Harbors Investment

How Does Tom Siering's Compensation Compare With Similar Sized Companies?

Our data indicates that Two Harbors Investment Corp. is worth US$4.1b, and total annual CEO compensation was reported as US$3.8m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at . We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. 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$5.1m.

That means Tom Siering receives fairly typical remuneration for the CEO of a company that size. 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 Two Harbors Investment has changed over time.

NYSE:TWO CEO Compensation, December 24th 2019

Is Two Harbors Investment Corp. Growing?

On average over the last three years, Two Harbors Investment Corp. has shrunk earnings per share by 63% each year (measured with a line of best fit). Its revenue is down 22% over last year.

Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.

Has Two Harbors Investment Corp. Been A Good Investment?

Most shareholders would probably be pleased with Two Harbors Investment Corp. for providing a total return of 45% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Tom Siering is paid around what is normal the leaders of comparable size companies.

We're not seeing great strides in earnings per share, but the company has clearly pleased some investors, given the returns over the last three years. So we can't see a reason to suggest the pay is inappropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Two Harbors Investment (free visualization of insider trades).

If you want to buy a stock that is better than Two Harbors Investment, this free list of high return, low debt companies is a great place to look.

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.