In 2012 John Matovina was appointed CEO of American Equity Investment Life Holding Company (NYSE:AEL). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. 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 John Matovina's Compensation Compare With Similar Sized Companies?
Our data indicates that American Equity Investment Life Holding Company is worth US$2.7b, and total annual CEO compensation was reported as US$3.6m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$864k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. 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.
So John Matovina receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see a visual representation of the CEO compensation at American Equity Investment Life Holding, below.
Is American Equity Investment Life Holding Company Growing?
American Equity Investment Life Holding Company has increased its earnings per share (EPS) by an average of 27% a year, over the last three years (using a line of best fit). Its revenue is down 41% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Shareholders might be interested in this free visualization of analyst forecasts.
Has American Equity Investment Life Holding Company Been A Good Investment?
American Equity Investment Life Holding Company has served shareholders reasonably well, with a total return of 15% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
John Matovina is paid around what is normal the leaders of comparable size companies.
We would wish for better returns (whether dividends or capital gains) but we do admire the solid EPS growth on show here. So considering these factors, we think the CEO pay is probably quite reasonable. So you may want to check if insiders are buying American Equity Investment Life Holding shares with their own money (free access).
Important note: American Equity Investment Life Holding may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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