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Is Greenlight Capital Re, Ltd.'s (NASDAQ:GLRE) CEO Overpaid Relative To Its Peers?

Simply Wall St

In 2017 Simon Burton was appointed CEO of Greenlight Capital Re, Ltd. (NASDAQ:GLRE). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Greenlight Capital Re

How Does Simon Burton's Compensation Compare With Similar Sized Companies?

Our data indicates that Greenlight Capital Re, Ltd. is worth US$374m, and total annual CEO compensation was reported as US$1.3m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$650k. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO total compensation was US$1.7m.

So Simon Burton is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

The graphic below shows how CEO compensation at Greenlight Capital Re has changed from year to year.

NasdaqGS:GLRE CEO Compensation, January 1st 2020

Is Greenlight Capital Re, Ltd. Growing?

On average over the last three years, Greenlight Capital Re, Ltd. has shrunk earnings per share by 67% each year (measured with a line of best fit). Its revenue is up 89% over last year.

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. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Greenlight Capital Re, Ltd. Been A Good Investment?

Since shareholders would have lost about 58% over three years, some Greenlight Capital Re, Ltd. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Remuneration for Simon Burton is close enough to the median pay for a CEO of a similar sized company .

The company cannot boast particularly strong per share growth. And it's hard to argue that the returns over the last three years have delighted. So many would argue that the CEO is certainly not underpaid. Whatever your view on compensation, you might want to check if insiders are buying or selling Greenlight Capital Re shares (free trial).

Important note: Greenlight Capital Re may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.