Mark Casale has been the CEO of Essent Group Ltd. (NYSE:ESNT) since 2008, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing Essent Group Ltd.'s CEO Compensation With the industry
According to our data, Essent Group Ltd. has a market capitalization of US$4.8b, and paid its CEO total annual compensation worth US$8.1m over the year to December 2019. We note that's an increase of 20% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$925k.
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$7.4m. This suggests that Essent Group remunerates its CEO largely in line with the industry average. What's more, Mark Casale holds US$75m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Talking in terms of the industry, salary represented approximately 58% of total compensation out of all the companies we analyzed, while other remuneration made up 42% of the pie. Essent Group pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Essent Group Ltd.'s Growth
Over the past three years, Essent Group Ltd. has seen its earnings per share (EPS) grow by 12% per year. It achieved revenue growth of 13% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Essent Group Ltd. Been A Good Investment?
Given the total shareholder loss of 3.0% over three years, many shareholders in Essent Group Ltd. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As we noted earlier, Essent Group pays its CEO in line with similar-sized companies belonging to the same industry. At the same time, the company has logged negative shareholder returns over the last three years. But on the bright side, EPS growth is positive over the same period. Overall, we wouldn't say Mark is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Essent Group that investors should be aware of in a dynamic business environment.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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