In 2005 Stephen Lindner was appointed CEO of American Financial Group, Inc. (NYSE:AFG). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we'll consider growth that the business demonstrates. 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.
How Does Stephen Lindner's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that American Financial Group, Inc. has a market cap of US$10.0b, and reported total annual CEO compensation of US$10m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$1.2m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
So Stephen Lindner receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at American Financial Group has changed over time.
Is American Financial Group, Inc. Growing?
Over the last three years American Financial Group, Inc. has grown its earnings per share (EPS) by an average of 3.4% per year (using a line of best fit). It achieved revenue growth of 7.1% over the last year.
I'd prefer higher revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. Shareholders might be interested in this free visualization of analyst forecasts.
Has American Financial Group, Inc. Been A Good Investment?
Boasting a total shareholder return of 46% over three years, American Financial Group, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Stephen Lindner is paid around the same as most CEOs of large companies.
The company isn't showing particularly great growth, but shareholder returns have been pleasing. So considering most shareholders would be happy, we'd say the CEO pay is appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling American Financial Group (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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