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Evan Greenberg has been the CEO of Chubb Limited (NYSE:CB) since 2004. First, this article will compare CEO compensation with compensation at other large companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Evan Greenberg's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Chubb Limited has a market cap of US$66b, and is paying total annual CEO compensation of US$20m. (This figure is for the year to December 2018). That's just a smallish increase of 6.5% on last year. We think total compensation is more important but we note that the CEO salary is lower, at US$1.4m. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
Thus we can conclude that Evan Greenberg receives more in total compensation than the median of a group of large companies in the same market as Chubb Limited. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Chubb, below.
Is Chubb Limited Growing?
Over the last three years Chubb Limited has grown its earnings per share (EPS) by an average of 6.2% per year (using a line of best fit). Revenue was pretty flat on last year.
I'd prefer higher revenue growth, but it is good to see modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. You might want to check this free visual report on analyst forecasts for future earnings.
Has Chubb Limited Been A Good Investment?
Chubb Limited has generated a total shareholder return of 23% over three years, so most shareholders would 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 the total CEO remuneration paid by Chubb Limited, and compared it to remuneration at a group of other large companies. As discussed above, we discovered that the company pays more than the median of that group.
We generally prefer to see stronger EPS growth, and we're not particularly impressed with the total shareholder return, over the last three years. In conclusion we think the company should definitely focus on improving the business before awarding any large pay rises. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Chubb.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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.