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Rick McKenney became the CEO of Unum Group (NYSE:UNM) 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Rick McKenney's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Unum Group has a market cap of US$7.5b, and is paying total annual CEO compensation of US$9.7m. (This is based on the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$1.0m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$6.3m.
As you can see, Rick McKenney is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Unum Group is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Unum Group has changed over time.
Is Unum Group Growing?
Over the last three years Unum Group has shrunk its earnings per share by an average of 2.3% per year (measured with a line of best fit). It achieved revenue growth of 2.8% over the last year.
The lack of earnings per share growth in the last three years is unimpressive. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has Unum Group Been A Good Investment?
Unum Group has served shareholders reasonably well, with a total return of 19% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We compared total CEO remuneration at Unum Group with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
While shareholder returns are acceptable, they don't delight. So we doubt many shareholders would consider the CEO pay to be particularly modest! Shareholders may want to check for free if Unum Group insiders are buying or selling shares.
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 firstname.lastname@example.org. 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.