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Does The Progressive Corporation's (NYSE:PGR) CEO Pay Compare Well With Peers?

Simply Wall St

In 2016 Tricia Griffith was appointed CEO of The Progressive Corporation (NYSE:PGR). First, this article will compare CEO compensation with compensation at other large companies. Then we'll look at a snap shot of the business growth. 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.

See our latest analysis for Progressive

How Does Tricia Griffith's Compensation Compare With Similar Sized Companies?

According to our data, The Progressive Corporation has a market capitalization of US$47b, and pays its CEO total annual compensation worth US$14m. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$791k. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

So Tricia Griffith is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

The graphic below shows how CEO compensation at Progressive has changed from year to year.

NYSE:PGR CEO Compensation, July 22nd 2019

Is The Progressive Corporation Growing?

On average over the last three years, The Progressive Corporation has grown earnings per share (EPS) by 43% each year (using a line of best fit). Its revenue is up 20% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. Shareholders might be interested in this free visualization of analyst forecasts.

Has The Progressive Corporation Been A Good Investment?

Boasting a total shareholder return of 163% over three years, The Progressive Corporation has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Remuneration for Tricia Griffith is close enough to the median pay for a CEO of a large company .

Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Progressive (free visualization of insider trades).

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 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. Thank you for reading.