Yahoo Finance Is Virtu Financial, Inc.'s (NASDAQ:VIRT) CEO Pay Fair?
Doug Cifu became the CEO of Virtu Financial, Inc. (NASDAQ:VIRT) in 2013. First, this article will compare CEO compensation with compensation at similar sized companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Virtu Financial
How Does Doug Cifu's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Virtu Financial, Inc. has a market cap of US$3.1b, and reported total annual CEO compensation of US$8.8m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. 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$5.1m.
It would therefore appear that Virtu Financial, Inc. pays Doug Cifu more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Virtu Financial has changed over time.
Is Virtu Financial, Inc. Growing?
On average over the last three years, Virtu Financial, Inc. has grown earnings per share (EPS) by 20% each year (using a line of best fit). It achieved revenue growth of 3.3% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. You might want to check this free visual report on analyst forecasts for future earnings.
Has Virtu Financial, Inc. Been A Good Investment?
Virtu Financial, Inc. has served shareholders reasonably well, with a total return of 14% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
We examined the amount Virtu Financial, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. We also think investors are doing ok, over the same time period. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we'd recommend further research on management. So you may want to check if insiders are buying Virtu Financial shares with their own money (free access).
Important note: Virtu Financial 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.
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.
