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How Does National Security Group's (NASDAQ:NSEC) CEO Pay Compare With Company Performance?

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Simply Wall St
·3 min read
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This article will reflect on the compensation paid to Bill Brunson who has served as CEO of The National Security Group, Inc. (NASDAQ:NSEC) since 2000. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for National Security Group.

See our latest analysis for National Security Group

Comparing The National Security Group, Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that The National Security Group, Inc. has a market capitalization of US$32m, and reported total annual CEO compensation of US$330k for the year to December 2019. That's mostly flat as compared to the prior year's compensation. In particular, the salary of US$256.6k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$532k. Accordingly, National Security Group pays its CEO under the industry median. What's more, Bill Brunson holds US$5.6m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2019

2018

Proportion (2019)

Salary

US$257k

US$257k

78%

Other

US$74k

US$77k

22%

Total Compensation

US$330k

US$334k

100%

On an industry level, roughly 16% of total compensation represents salary and 84% is other remuneration. According to our research, National Security Group has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
ceo-compensation

A Look at The National Security Group, Inc.'s Growth Numbers

The National Security Group, Inc. has reduced its earnings per share by 16% a year over the last three years. In the last year, its revenue changed by just 0.9%.

Few shareholders would be pleased to read that EPS have declined. 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. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has The National Security Group, Inc. Been A Good Investment?

Given the total shareholder loss of 11% over three years, many shareholders in The National Security Group, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we touched on above, The National Security Group, Inc. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. EPS growth has failed to impress us, and the same can be said about shareholder returns. We can't say the CEO compensation is high, but shareholders will be cold to a bump at this stage, considering negative investor returns.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for National Security Group you should be aware of, and 1 of them doesn't sit too well with us.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.