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Is Enstar Group Limited's (NASDAQ:ESGR) CEO Salary Justified?

Simply Wall St

Dominic Silvester has been the CEO of Enstar Group Limited (NASDAQ:ESGR) since 2001. 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. 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 Enstar Group

How Does Dominic Silvester's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Enstar Group Limited has a market cap of US$4.3b, and reported total annual CEO compensation of US$3.4m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$2.5m. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$4.9m.

That means Dominic Silvester 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.

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

NasdaqGS:ESGR CEO Compensation, February 13th 2020

Is Enstar Group Limited Growing?

Over the last three years Enstar Group Limited has shrunk its earnings per share by an average of 1.1% per year (measured with a line of best fit). In the last year, its revenue is up 136%.

Investors should note that, over three years, earnings per share are down. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Enstar Group Limited Been A Good Investment?

With a total shareholder return of 2.5% over three years, Enstar Group Limited has done okay by shareholders. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Dominic Silvester is paid around the same as most CEOs of similar size companies.

The company isn't showing particularly great growth, and shareholder turns haven't been particularly inspiring in the last few years. While there is room for improvement, we haven't seen evidence to suggest the pay is too generous. Whatever your view on compensation, you might want to check if insiders are buying or selling Enstar Group shares (free trial).

If you want to buy a stock that is better than Enstar Group, this free list of high return, low debt companies is a great place to look.

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.