How Is AMERISAFE's (NASDAQ:AMSF) CEO Paid Relative To Peers?
This article will reflect on the compensation paid to Gerry Frost who has served as CEO of AMERISAFE, Inc. (NASDAQ:AMSF) since 2015. This analysis will also assess whether AMERISAFE pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
See our latest analysis for AMERISAFE
Comparing AMERISAFE, Inc.'s CEO Compensation With the industry
According to our data, AMERISAFE, Inc. has a market capitalization of US$1.3b, and paid its CEO total annual compensation worth US$2.2m over the year to December 2019. Notably, that's an increase of 23% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$630k.
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$3.8m. In other words, AMERISAFE pays its CEO lower than the industry median. Furthermore, Gerry Frost directly owns US$4.3m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$630k | US$523k | 29% |
Other | US$1.6m | US$1.3m | 71% |
Total Compensation | US$2.2m | US$1.8m | 100% |
Speaking on an industry level, nearly 16% of total compensation represents salary, while the remainder of 84% is other remuneration. It's interesting to note that AMERISAFE pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
AMERISAFE, Inc.'s Growth
AMERISAFE, Inc.'s earnings per share (EPS) grew 11% per year over the last three years. Its revenue is down 6.3% over the previous year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 AMERISAFE, Inc. Been A Good Investment?
Boasting a total shareholder return of 48% over three years, AMERISAFE, 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.
To Conclude...
As we touched on above, AMERISAFE, Inc. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Since EPS growth is heading in a positive direction; many would agree with our assessment that the pay is modest. Given the strong history of shareholder returns, the shareholders are probably very happy with Gerry's performance.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for AMERISAFE (1 shouldn't be ignored!) that you should be aware of before investing here.
Switching gears from AMERISAFE, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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