Ryan Schneider became the CEO of Realogy Holdings Corp. (NYSE:RLGY) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Ryan Schneider Compare With Other Companies In The Industry?
At the time of writing, our data shows that Realogy Holdings Corp. has a market capitalization of US$1.2b, and reported total annual CEO compensation of US$8.8m for the year to December 2019. We note that's a small decrease of 3.6% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.
In comparison with other companies in the industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$8.8m. This suggests that Realogy Holdings remunerates its CEO largely in line with the industry average. Furthermore, Ryan Schneider directly owns US$2.1m worth of shares in the company.
On an industry level, around 29% of total compensation represents salary and 71% is other remuneration. Realogy Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Realogy Holdings Corp.'s Growth Numbers
Realogy Holdings Corp. has reduced its earnings per share by 100% a year over the last three years. It saw its revenue drop 4.5% over the last year.
The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. 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 Realogy Holdings Corp. Been A Good Investment?
Since shareholders would have lost about 66% over three years, some Realogy Holdings Corp. investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
As we touched on above, Realogy Holdings Corp. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Realogy Holdings (1 makes us a bit uncomfortable!) that you should be aware of before investing here.
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.
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. 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.
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