Kevin O'Donnell has been the CEO of RenaissanceRe Holdings Ltd. (NYSE:RNR) since 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Kevin O'Donnell's Compensation Compare With Similar Sized Companies?
Our data indicates that RenaissanceRe Holdings Ltd. is worth US$8.4b, and total annual CEO compensation was reported as US$11m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.1m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$6.4m.
Thus we can conclude that Kevin O'Donnell receives more in total compensation than the median of a group of companies in the same market, and of similar size to RenaissanceRe Holdings Ltd.. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at RenaissanceRe Holdings has changed from year to year.
Is RenaissanceRe Holdings Ltd. Growing?
On average over the last three years, RenaissanceRe Holdings Ltd. has grown earnings per share (EPS) by 5.7% each year (using a line of best fit). In the last year, its revenue is up 80%.
It's great to see that revenue growth is strong. With that in mind, the modestly improving EPS seems positive. So while I'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! It could be important to check this free visual depiction of what analysts expect for the future.
Has RenaissanceRe Holdings Ltd. Been A Good Investment?
I think that the total shareholder return of 43%, over three years, would leave most RenaissanceRe Holdings Ltd. shareholders smiling. 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.
We examined the amount RenaissanceRe Holdings Ltd. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Over the last three years returns to investors have been great, though we might have liked stronger business growth. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. So you may want to check if insiders are buying RenaissanceRe Holdings shares with their own money (free access).
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.
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