Jack Remondi became the CEO of Navient Corporation (NASDAQ:NAVI) in 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Jack Remondi's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Navient Corporation has a market cap of US$3.1b, and reported total annual CEO compensation of US$6.9m for 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. 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$2.0b to US$6.4b. The median total CEO compensation was US$4.9m.
It would therefore appear that Navient Corporation pays Jack Remondi more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration 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.
The graphic below shows how CEO compensation at Navient has changed from year to year.
Is Navient Corporation Growing?
Navient Corporation has reduced its earnings per share by an average of 11% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down 5.0%.
Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. 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 Navient Corporation Been A Good Investment?
With a total shareholder return of 0.7% over three years, Navient Corporation has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.
We compared total CEO remuneration at Navient Corporation 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 you may want to delve deeper, because we don't think the CEO pay is too low. Shareholders may want to check for free if Navient insiders are buying or selling shares.
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.
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.
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