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Should You Worry About Synchrony Financial’s (NYSE:SYF) CEO Salary Level?

Margaret Keane has been the CEO of Synchrony Financial (NYSE:SYF) since 2014. First, this article will compare CEO compensation with compensation at other large companies. Then we’ll look at a snap shot of the business growth. 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.

See our latest analysis for Synchrony Financial

How Does Margaret Keane’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Synchrony Financial has a market cap of US$17b, and is paying total annual CEO compensation of US$14m. (This figure is for the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.2m. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO compensation was US$11m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

That means Margaret Keane receives fairly typical remuneration for the CEO of a large company. 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.

The graphic below shows how CEO compensation at Synchrony Financial has changed from year to year.

NYSE:SYF CEO Compensation December 17th 18
NYSE:SYF CEO Compensation December 17th 18

Is Synchrony Financial Growing?

Synchrony Financial has increased its earnings per share (EPS) by an average of 3.1% a year, over the last three years Its revenue is up 6.3% over last year.

I’d prefer higher revenue growth, but the modest improvement in EPS is good. Considering these factors I’d say performance has been pretty decent, though not amazing.

It could be important to check this free visual depiction of what analysts expect for the future.

Has Synchrony Financial Been A Good Investment?

Since shareholders would have lost about 15% over three years, some Synchrony Financial shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

Remuneration for Margaret Keane is close enough to the median pay for a CEO of a large company .

The company cannot boast particularly strong per share growth. And we think the shareholder returns – over three years – have been underwhelming. So many would argue that the CEO is certainly not underpaid. So you may want to check if insiders are buying Synchrony Financial shares with their own money (free access).

Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.

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