Our View On Synchrony Financial's (NYSE:SYF) CEO Pay
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Margaret Keane has been the CEO of Synchrony Financial (NYSE:SYF) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Synchrony Financial pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Synchrony Financial
How Does Total Compensation For Margaret Keane Compare With Other Companies In The Industry?
According to our data, Synchrony Financial has a market capitalization of US$14b, and paid its CEO total annual compensation worth US$12m over the year to December 2019. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.2m.
For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$9.9m. This suggests that Synchrony Financial remunerates its CEO largely in line with the industry average. Furthermore, Margaret Keane directly owns US$7.8m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$1.2m | US$1.2m | 10% |
Other | US$11m | US$11m | 90% |
Total Compensation | US$12m | US$12m | 100% |
On an industry level, around 16% of total compensation represents salary and 84% is other remuneration. It's interesting to note that Synchrony Financial allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Synchrony Financial's Growth
Synchrony Financial's earnings per share (EPS) grew 20% per year over the last three years. Its revenue is down 4.8% over the previous year.
This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Synchrony Financial Been A Good Investment?
Given the total shareholder loss of 14% over three years, many shareholders in Synchrony Financial are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
As we noted earlier, Synchrony Financial pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, the company has logged negative shareholder returns over the previous three years. But earnings growth is moving in a favorable direction, certainly a positive sign. Overall, we wouldn't say Margaret is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Synchrony Financial that you should be aware of before investing.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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.
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