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Does Global Indemnity Limited's (NASDAQ:GBLI) CEO Pay Reflect Performance?

Simply Wall St

In 2011 Cynthia Valko was appointed CEO of Global Indemnity Limited (NASDAQ:GBLI). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Global Indemnity

How Does Cynthia Valko's Compensation Compare With Similar Sized Companies?

Our data indicates that Global Indemnity Limited is worth US$399m, and total annual CEO compensation was reported as US$2.1m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$800k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$1.7m.

That means Cynthia Valko receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see a visual representation of the CEO compensation at Global Indemnity, below.

NasdaqGS:GBLI CEO Compensation, December 4th 2019

Is Global Indemnity Limited Growing?

Over the last three years Global Indemnity Limited has shrunk its earnings per share by an average of 104% per year (measured with a line of best fit). Its revenue is up 6.3% over last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Global Indemnity Limited Been A Good Investment?

Given the total loss of 23% over three years, many shareholders in Global Indemnity Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Cynthia Valko is paid around what is normal the leaders of comparable size companies.

Returns have been disappointing and the company is not growing its earnings per share. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. Shareholders may want to check for free if Global Indemnity insiders are buying or selling shares.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.

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. Thank you for reading.