Evan Greenberg became the CEO of Chubb Limited (NYSE:CB) in 2004. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Evan Greenberg's Compensation Compare With Similar Sized Companies?
According to our data, Chubb Limited has a market capitalization of US$69b, and paid its CEO total annual compensation worth US$20m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$1.4m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
As you can see, Evan Greenberg is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean Chubb Limited is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Chubb has changed over time.
Is Chubb Limited Growing?
Over the last three years Chubb Limited has shrunk its earnings per share by an average of 2.9% per year (measured with a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.
The lack of earnings per share growth in the last three years is unimpressive. And the flat revenue is seriously uninspiring. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has Chubb Limited Been A Good Investment?
With a total shareholder return of 27% over three years, Chubb Limited shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
We compared total CEO remuneration at Chubb Limited with the amount paid at other large companies. As discussed above, we discovered that the company pays more than the median of that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us. While shareholder returns are acceptable, they don't delight. So we think more research is needed, but we don't think the CEO underpaid. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Chubb (free visualization of insider trades).
Important note: Chubb 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.
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If you spot an error that warrants correction, please contact the editor at email@example.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. Thank you for reading.