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This article will reflect on the compensation paid to Scott Stephenson who has served as CEO of Verisk Analytics, Inc. (NASDAQ:VRSK) since 2013. This analysis will also assess whether Verisk Analytics pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Scott Stephenson Compare With Other Companies In The Industry?
Our data indicates that Verisk Analytics, Inc. has a market capitalization of US$33b, and total annual CEO compensation was reported as US$9.1m for the year to December 2019. We note that's an increase of 17% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.
On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$14m. This suggests that Scott Stephenson is paid below the industry median. What's more, Scott Stephenson holds US$162m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, roughly 22% of total compensation represents salary and 78% is other remuneration. Verisk Analytics sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Verisk Analytics, Inc.'s Growth Numbers
Verisk Analytics, Inc.'s earnings per share (EPS) grew 14% per year over the last three years. Its revenue is up 8.0% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Verisk Analytics, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Verisk Analytics, Inc. for providing a total return of 116% 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.
As we touched on above, Verisk Analytics, Inc. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Since EPS growth is heading in a positive direction; many would agree with our assessment that the pay is modest. Plus, we can't ignore the impressive shareholder returns, and won't be surprised if some shareholders were to reward such excellent all-around performance with a raise.
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 Verisk Analytics that you should be aware of before investing.
Switching gears from Verisk Analytics, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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