In 2013 Jay Madhu was appointed CEO of Oxbridge Re Holdings Limited (NASDAQ:OXBR). 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 Jay Madhu's Compensation Compare With Similar Sized Companies?
According to our data, Oxbridge Re Holdings Limited has a market capitalization of US$5.5m, and pays its CEO total annual compensation worth US$239k. (This number is for the twelve months until December 2018). Notably, the salary of US$232k is the vast majority of the CEO compensation. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$489k.
A first glance this seems like a real positive for shareholders, since Jay Madhu is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at Oxbridge Re Holdings has changed from year to year.
Is Oxbridge Re Holdings Limited Growing?
Oxbridge Re Holdings Limited has reduced its earnings per share by an average of 46% a year, over the last three years (measured with a line of best fit). It saw its revenue drop -84% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Oxbridge Re Holdings Limited Been A Good Investment?
Given the total loss of 78% over three years, many shareholders in Oxbridge Re Holdings Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
Oxbridge Re Holdings Limited is currently paying its CEO below what is normal for companies of its size.
Shareholders should note that compensation for Jay Madhu is under the median of a group of similar sized companies. But then, EPS growth is lacking and so are the returns to shareholders. Considering all these factors, we'd stop short of saying the CEO pay is too high, but we don't think shareholders would want to see a pay rise before business performance improves. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Oxbridge Re Holdings (free visualization of insider trades).
If you want to buy a stock that is better than Oxbridge Re Holdings, this free list of high return, low debt companies is a great place to look.
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