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Is Markel Corporation's (NYSE:MKL) CEO Paid Enough Relative To Peers?

Simply Wall St

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Richie Whitt has been the CEO of Markel Corporation (NYSE:MKL) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Markel

How Does Richie Whitt's Compensation Compare With Similar Sized Companies?

Our data indicates that Markel Corporation is worth US$15b, and total annual CEO compensation is US$3.7m. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$981k. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

Most shareholders would consider it a positive that Richie Whitt takes less in total compensation than the CEOs of most other large companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.

You can see, below, how CEO compensation at Markel has changed over time.

NYSE:MKL CEO Compensation, July 2nd 2019

Is Markel Corporation Growing?

Markel Corporation has reduced its earnings per share by an average of 9.2% a year, over the last three years (measured with a line of best fit). Its revenue is up 24% over last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.

Has Markel Corporation Been A Good Investment?

Markel Corporation has served shareholders reasonably well, with a total return of 17% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

Markel Corporation is currently paying its CEO below what is normal for large companies.

Shareholders should note that compensation for Richie Whitt is under the median of a group of large companies. But the business isn't growing earnings per share, and the returns to shareholders haven't been wonderful. We would like to see EPS growth from the business, although we wouldn't say the CEO pay is high. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Markel (free visualization of insider trades).

Important note: Markel may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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.