NYSE:CI) in 2009, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Cigna.” data-reactid=”28″>David Cordani became the CEO of Cigna Corporation (NYSE:CI) in 2009, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Cigna.
View our latest analysis for Cigna ” data-reactid=”29″>View our latest analysis for Cigna
Comparing Cigna Corporation’s CEO Compensation With the industry
Our data indicates that Cigna Corporation has a market capitalization of US$67b, and total annual CEO compensation was reported as US$19m for the year to December 2019. That’s mostly flat as compared to the prior year’s compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.5m.
In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$16m. From this we gather that David Cordani is paid around the median for CEOs in the industry. What’s more, David Cordani holds US$81m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | US$1.5m | US$1.5m | 8% |
| Other | US$18m | US$17m | 92% |
| Total Compensation | US$19m | US$19m | 100% |
Speaking on an industry level, nearly 16% of total compensation represents salary, while the remainder of 84% is other remuneration. In Cigna’s case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It’s important to note that a slant towards non-salary compensation suggests that total pay is tied to the company’s performance.
Cigna Corporation’s Growth
Cigna Corporation’s earnings per share (EPS) grew 17% per year over the last three years. Its revenue is up 50% over the last year.
this free visual report on analyst forecasts for the company’s future earnings..” data-reactid=”54″>Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company’s future earnings..
Has Cigna Corporation Been A Good Investment?
Cigna Corporation has generated a total shareholder return of 3.1% over three years, so most shareholders wouldn’t be too disappointed. 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.
To Conclude…
As we noted earlier, Cigna pays its CEO in line with similar-sized companies belonging to the same industry. But EPS growth over the last three years has been impressive, although the same cannot be said for shareholder returns. So considering these factors, we think the compensation is probably quite reasonable, but investor returns need a boost moving forward.
1 warning sign for Cigna that investors should think about before committing capital to this stock.” data-reactid=”59″>CEO compensation can have a massive impact on performance, but it’s just one element. That’s why we did some digging and identified 1 warning sign for Cigna that investors should think about before committing capital to this stock.
list of interesting companies that have HIGH return on equity and low debt.” data-reactid=”60″>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.
Get in touch with us directly. Alternatively, email [email protected].” data-reactid=”61″>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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