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Should You Worry About TFS Financial Corporation's (NASDAQ:TFSL) CEO Salary Level?

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In 1997 Marc Stefanski was appointed CEO of TFS Financial Corporation (NASDAQ:TFSL). 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for TFS Financial

How Does Marc Stefanski's Compensation Compare With Similar Sized Companies?

Our data indicates that TFS Financial Corporation is worth US$4.8b, and total annual CEO compensation was reported as US$4.7m for the year to September 2019. That's a fairly small increase of 6.7% on year before. While we always look at total compensation first, we note that the salary component is less, at US$1.5m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$7.2m.

Most shareholders would consider it a positive that Marc Stefanski takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.

You can see a visual representation of the CEO compensation at TFS Financial, below.

NasdaqGS:TFSL CEO Compensation, March 16th 2020
NasdaqGS:TFSL CEO Compensation, March 16th 2020

Is TFS Financial Corporation Growing?

Over the last three years TFS Financial Corporation has shrunk its earnings per share by an average of 1.7% per year (measured with a line of best fit). Its revenue is down 3.1% over last year.

The lack of earnings per share growth in the last three years is unimpressive. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.

Has TFS Financial Corporation Been A Good Investment?

TFS Financial Corporation has served shareholders reasonably well, with a total return of 17% 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.

In Summary...

It looks like TFS Financial Corporation pays its CEO less than similar sized companies.

The compensation paid to Marc Stefanski is lower than is usual at similar sized companies. However, the earnings per share are not moving in the right direction, and the returns to shareholders could have been better. We would like to see EPS growth from the business, although we wouldn't say the CEO pay is high. CEO compensation is an important area to keep your eyes on, but we've also identified 3 warning signs for TFS Financial (1 can't be ignored!) that you should be aware of before investing here.

If you want to buy a stock that is better than TFS Financial, this free list of high return, low debt companies is a great place to look.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.

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. Thank you for reading.