Tom McInerney became the CEO of Genworth Financial, Inc. (NYSE:GNW) in 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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 Tom McInerney's Compensation Compare With Similar Sized Companies?
According to our data, Genworth Financial, Inc. has a market capitalization of US$2.2b, and paid its CEO total annual compensation worth US$9.3m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$997k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.9m.
Thus we can conclude that Tom McInerney receives more in total compensation than the median of a group of companies in the same market, and of similar size to Genworth Financial, Inc.. However, this doesn't necessarily mean the pay is too high. 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 Genworth Financial has changed over time.
Is Genworth Financial, Inc. Growing?
Over the last three years Genworth Financial, Inc. has grown its earnings per share (EPS) by an average of 50% per year (using a line of best fit). In the last year, its revenue is up 13%.
This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Genworth Financial, Inc. Been A Good Investment?
Genworth Financial, Inc. has generated a total shareholder return of 11% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
We compared total CEO remuneration at Genworth Financial, Inc. with the amount paid at companies with a similar market capitalization. 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. We also note that, over the same time frame, shareholder returns haven't been bad. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. So you may want to check if insiders are buying Genworth Financial shares with their own money (free access).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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