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How Much Did Insperity's (NYSE:NSP) CEO Pocket Last Year?

Simply Wall St
·3 min read

This article will reflect on the compensation paid to Paul Sarvadi who has served as CEO of Insperity, Inc. (NYSE:NSP) since 1989. This analysis will also assess whether Insperity pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Insperity

How Does Total Compensation For Paul Sarvadi Compare With Other Companies In The Industry?

According to our data, Insperity, Inc. has a market capitalization of US$2.5b, and paid its CEO total annual compensation worth US$7.4m over the year to December 2019. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.

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$7.3m. So it looks like Insperity compensates Paul Sarvadi in line with the median for the industry. Moreover, Paul Sarvadi also holds US$111m worth of Insperity stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2019

2018

Proportion (2019)

Salary

US$1.1m

US$1.0m

14%

Other

US$6.3m

US$6.2m

86%

Total Compensation

US$7.4m

US$7.2m

100%

Talking in terms of the industry, salary represented approximately 21% of total compensation out of all the companies we analyzed, while other remuneration made up 79% of the pie. Insperity sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

Insperity, Inc.'s Growth

Over the past three years, Insperity, Inc. has seen its earnings per share (EPS) grow by 33% per year. Its revenue is up 6.2% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Insperity, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Insperity, Inc. for providing a total return of 50% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

As previously discussed, Paul is compensated close to the median for companies of its size, and which belong to the same industry. The company is growing EPS and total shareholder returns have been pleasing. So one could argue that CEO compensation is quite modest, if you consider company performance! Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Insperity (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.