Does Heritage Insurance Holdings Inc’s (NYSE:HRTG) CEO Pay Compare Well With Peers?
In 2014 Bruce Lucas was appointed CEO of Heritage Insurance Holdings Inc (NYSE:HRTG). 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for Heritage Insurance Holdings
How Does Bruce Lucas’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Heritage Insurance Holdings Inc has a market cap of US$417m, and is paying total annual CEO compensation of US$6.7m. (This number is for the twelve months until 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$2.1m. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO compensation of that group was US$1.5m.
It would therefore appear that Heritage Insurance Holdings Inc pays Bruce Lucas more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Heritage Insurance Holdings has changed from year to year.
Is Heritage Insurance Holdings Inc Growing?
On average over the last three years, Heritage Insurance Holdings Inc has shrunk earnings per share by 81% each year. It achieved revenue growth of 16% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has Heritage Insurance Holdings Inc Been A Good Investment?
Since shareholders would have lost about 31% over three years, some Heritage Insurance Holdings Inc shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary…
We examined the amount Heritage Insurance Holdings Inc pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
Over the same period, investors would have come away with nothing in the way of share price gains. Some might well form the view that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Heritage Insurance Holdings.
Or you might prefer examine intently this intuitive graph showing past earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
