How Is Virtu Financial's (NASDAQ:VIRT) CEO Paid Relative To Peers?

Simply Wall St
·4-min read

Doug Cifu has been the CEO of Virtu Financial, Inc. (NASDAQ:VIRT) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Virtu Financial pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Virtu Financial

How Does Total Compensation For Doug Cifu Compare With Other Companies In The Industry?

According to our data, Virtu Financial, Inc. has a market capitalization of US$4.8b, and paid its CEO total annual compensation worth US$4.6m over the year to December 2019. Notably, that's a decrease of 48% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.

For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$6.8m. That is to say, Doug Cifu is paid under the industry median. Furthermore, Doug Cifu directly owns US$4.7m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2019

2018

Proportion (2019)

Salary

US$1.0m

US$1.0m

22%

Other

US$3.6m

US$7.8m

78%

Total Compensation

US$4.6m

US$8.8m

100%

Speaking on an industry level, nearly 13% of total compensation represents salary, while the remainder of 87% is other remuneration. Virtu Financial pays out 22% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

A Look at Virtu Financial, Inc.'s Growth Numbers

Virtu Financial, Inc.'s earnings per share (EPS) grew 27% per year over the last three years. Its revenue is up 57% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth we like to see. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Virtu Financial, Inc. Been A Good Investment?

Boasting a total shareholder return of 68% over three years, Virtu Financial, Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

As we noted earlier, Virtu Financial pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Considering robust earnings growth, we believe Doug to be modestly paid. Given the strong history of shareholder returns, the shareholders are probably very happy with Doug's performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 5 warning signs for Virtu Financial (of which 2 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Important note: Virtu 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.

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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