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This article will reflect on the compensation paid to George Rountree who has served as CEO of White Mountains Insurance Group, Ltd. (NYSE:WTM) since 2017. This analysis will also assess whether White Mountains Insurance Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing White Mountains Insurance Group, Ltd.'s CEO Compensation With the industry
At the time of writing, our data shows that White Mountains Insurance Group, Ltd. has a market capitalization of US$2.4b, and reported total annual CEO compensation of US$6.9m for the year to December 2019. Notably, that's an increase of 9.8% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$500k.
In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$5.2m. This suggests that George Rountree is paid more than the median for the industry. Furthermore, George Rountree directly owns US$15m worth of shares in the company, implying that they are deeply invested in the company's success.
Speaking on an industry level, nearly 17% of total compensation represents salary, while the remainder of 83% is other remuneration. In White Mountains Insurance Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at White Mountains Insurance Group, Ltd.'s Growth Numbers
Over the past three years, White Mountains Insurance Group, Ltd. has seen its earnings per share (EPS) grow by 75% per year. In the last year, its revenue is down 31%.
Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has White Mountains Insurance Group, Ltd. Been A Good Investment?
Since shareholders would have lost about 7.6% over three years, some White Mountains Insurance Group, Ltd. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
As we noted earlier, White Mountains Insurance Group pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But the company has impressed with its EPS growth, but it's disappointing to see negative shareholder returns over the same period. Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for White Mountains Insurance Group that investors should think about before committing capital to this stock.
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.
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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