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Is Virtu Financial, Inc. (NASDAQ:VIRT) Overpaying Its CEO?

Simply Wall St

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Doug Cifu has been the CEO of Virtu Financial, Inc. (NASDAQ:VIRT) since 2013. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Virtu Financial

How Does Doug Cifu's Compensation Compare With Similar Sized Companies?

Our data indicates that Virtu Financial, Inc. is worth US$4.1b, and total annual CEO compensation is US$8.8m. (This is based on the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0m. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO total compensation was US$5.2m.

Thus we can conclude that Doug Cifu receives more in total compensation than the median of a group of companies in the same market, and of similar size to Virtu Financial, Inc.. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Virtu Financial, below.

NasdaqGS:VIRT CEO Compensation, July 17th 2019

Is Virtu Financial, Inc. Growing?

Over the last three years Virtu Financial, Inc. has grown its earnings per share (EPS) by an average of 41% per year (using a line of best fit). It achieved revenue growth of 11% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Shareholders might be interested in this free visualization of analyst forecasts.

Has Virtu Financial, Inc. Been A Good Investment?

Boasting a total shareholder return of 42% over three years, Virtu Financial, Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

We examined the amount Virtu Financial, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. On top of that, in the same period, returns to shareholders have been great. So, considering this good performance, the CEO compensation may be quite appropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling Virtu Financial shares (free trial).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.