Yahoo Finance We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Stifel Financial Corp.'s (NYSE:SF) CEO For Now
Key Insights
Stifel Financial to hold its Annual General Meeting on 5th of June
Salary of US$200.0k is part of CEO Ron Kruszewski's total remuneration
Total compensation is 64% above industry average
Stifel Financial's EPS declined by 3.0% over the past three years while total shareholder return over the past three years was 21%
Despite positive share price growth of 21% for Stifel Financial Corp. (NYSE:SF) over the last few years, earnings growth has been disappointing, which suggests something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 5th of June. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.
See our latest analysis for Stifel Financial
How Does Total Compensation For Ron Kruszewski Compare With Other Companies In The Industry?
At the time of writing, our data shows that Stifel Financial Corp. has a market capitalization of US$8.2b, and reported total annual CEO compensation of US$13m for the year to December 2023. That's a modest increase of 3.2% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$200k.
For comparison, other companies in the American Capital Markets industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$8.1m. Hence, we can conclude that Ron Kruszewski is remunerated higher than the industry median. Furthermore, Ron Kruszewski directly owns US$106m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$200k | US$200k | 2% |
Other | US$13m | US$13m | 98% |
Total Compensation | US$13m | US$13m | 100% |
Speaking on an industry level, nearly 10% of total compensation represents salary, while the remainder of 90% is other remuneration. Interestingly, the company has chosen to go down an unconventional route in that it pays a smaller salary to Ron Kruszewski as compared to non-salary compensation over the one-year period examined. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Stifel Financial Corp.'s Growth
Over the last three years, Stifel Financial Corp. has shrunk its earnings per share by 3.0% per year. In the last year, its revenue changed by just 0.7%.
Overall this is not a very positive result for shareholders. And the flat revenue hardly impresses. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Stifel Financial Corp. Been A Good Investment?
With a total shareholder return of 21% over three years, Stifel Financial Corp. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
Stifel Financial primarily uses non-salary benefits to reward its CEO. While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for Stifel Financial that investors should be aware of in a dynamic business environment.
Important note: Stifel Financial is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
