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In 2007 Gabe Tirador was appointed CEO of Mercury General Corporation (NYSE:MCY). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. 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 Gabe Tirador's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Mercury General Corporation has a market cap of US$3.1b, and is paying total annual CEO compensation of US$1.4m. (This number is for the twelve months until December 2017). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$975k. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.1m.
Most shareholders would consider it a positive that Gabe Tirador takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.
The graphic below shows how CEO compensation at Mercury General has changed from year to year.
Is Mercury General Corporation Growing?
Over the last three years, Mercury General Corporation has not seen its earnings per share change much, though there is a positive trend. In the last year, its revenue is up 8.0%.
I would argue that the improvement in revenue isn't particularly impressive, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. Shareholders might be interested in this free visualization of analyst forecasts.
Has Mercury General Corporation Been A Good Investment?
Mercury General Corporation has generated a total shareholder return of 24% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
It looks like Mercury General Corporation pays its CEO less than similar sized companies.
It's well worth noting that while Gabe Tirador is paid less than most company leaders (at companies of similar size), share price performance has been somewhat uninspiring. So shareholders may not be elated, but they shouldn't be worried about the CEO compensation, either. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Mercury General.
Important note: Mercury General 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 firstname.lastname@example.org. 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.