Is Hallmark Financial Services, Inc. (NASDAQ:HALL) Overpaying Its CEO?
Naveen Anand became the CEO of Hallmark Financial Services, Inc. (NASDAQ:HALL) in 2014. 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for Hallmark Financial Services
How Does Naveen Anand's Compensation Compare With Similar Sized Companies?
According to our data, Hallmark Financial Services, Inc. has a market capitalization of US$318m, and pays its CEO total annual compensation worth US$1.0m. (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$500k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$1.9m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at Hallmark Financial Services, below.
Is Hallmark Financial Services, Inc. Growing?
Over the last three years Hallmark Financial Services, Inc. has grown its earnings per share (EPS) by an average of 29% per year (using a line of best fit). It achieved revenue growth of 10% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Hallmark Financial Services, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Hallmark Financial Services, Inc. for providing a total return of 68% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
It appears that Hallmark Financial Services, Inc. remunerates its CEO below most similar sized companies. Many would consider this to indicate that the pay is modest since the business is growing. And given most shareholders are probably very happy with recent returns, you might even think that Naveen Anand deserves a raise!
It's not often we see shareholders do so well, and yet the CEO is paid modestly. The cherry on top would be if company insiders are buying shares with their own money. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Hallmark Financial Services.
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.
