Paresh Patel became the CEO of HCI Group, Inc. (NYSE:HCI) in 2011. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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.
How Does Paresh Patel's Compensation Compare With Similar Sized Companies?
According to our data, HCI Group, Inc. has a market capitalization of US$321m, and paid its CEO total annual compensation worth US$6.1m over the year to December 2019. Notably, that's an increase of 43% over the year before. We think total compensation is more important but we note that the CEO salary is lower, at US$950k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. 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$2.3m.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Speaking on an industry level, we can see that nearly 18% of total compensation represents salary, while the remainder of 82% is other remuneration. So it seems like there isn't a significant difference between HCI Group and the broader market, in terms of salary allocation in the overall compensation package.
As you can see, Paresh Patel is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean HCI Group, Inc. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance. You can see a visual representation of the CEO compensation at HCI Group, below.
Is HCI Group, Inc. Growing?
Over the last three years HCI Group, Inc. has seen earnings per share (EPS) move in a positive direction by an average of 4.9% per year (using a line of best fit). It achieved revenue growth of 4.8% over the last year.
I'd prefer higher revenue growth, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. It could be important to check this free visual depiction of what analysts expect for the future.
Has HCI Group, Inc. Been A Good Investment?
With a three year total loss of 0.7%, HCI Group, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
We compared the total CEO remuneration paid by HCI Group, Inc., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. This contrasts with the growth in CEO remuneration, in the last year. Although we'd stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. On another note, we've spotted 1 warning sign for HCI Group that investors should look into moving forward.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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