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This article will reflect on the compensation paid to Randy Ramlo who has served as CEO of United Fire Group, Inc. (NASDAQ:UFCS) since 2007. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for United Fire Group.
How Does Total Compensation For Randy Ramlo Compare With Other Companies In The Industry?
According to our data, United Fire Group, Inc. has a market capitalization of US$626m, and paid its CEO total annual compensation worth US$2.3m over the year to December 2019. That's a notable decrease of 28% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$800k.
On examining similar-sized companies in the industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$3.0m. From this we gather that Randy Ramlo is paid around the median for CEOs in the industry. What's more, Randy Ramlo holds US$1.7m worth of shares in the company in their own name.
On an industry level, around 16% of total compensation represents salary and 84% is other remuneration. United Fire Group is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
United Fire Group, Inc.'s Growth
Over the last three years, United Fire Group, Inc. has shrunk its earnings per share by 107% per year. It saw its revenue drop 9.4% over the last year.
Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has United Fire Group, Inc. Been A Good Investment?
Given the total shareholder loss of 37% over three years, many shareholders in United Fire Group, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
As we noted earlier, United Fire Group pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for United Fire Group that investors should think about before committing capital to this stock.
Important note: United Fire Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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.
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