Alan Colberg became the CEO of Assurant, Inc. (NYSE:AIZ) in 2015. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Alan Colberg’s Compensation Compare With Similar Sized Companies?
Our data indicates that Assurant, Inc. is worth US$6.1b, and total annual CEO compensation is US$9.3m. (This is based on the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$955k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$6.2m.
Thus we can conclude that Alan Colberg receives more in total compensation than the median of a group of companies in the same market, and of similar size to Assurant, Inc.. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Assurant has changed from year to year.
Is Assurant, Inc. Growing?
Over the last three years Assurant, Inc. has grown its earnings per share (EPS) by an average of 10% per year (using a line of best fit). In the last year, its revenue is up 26%.
This demonstrates that the company has been improving recently. A good result. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Assurant, Inc. Been A Good Investment?
I think that the total shareholder return of 35%, over three years, would leave most Assurant, Inc. shareholders smiling. 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.
We examined the amount Assurant, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. On top of that, in the same period, returns to shareholders have been great. As a result of this good performance, the CEO remuneration may well be quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Assurant shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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