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Marita Zuraitis became the CEO of Horace Mann Educators Corporation (NYSE:HMN) in 2013, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing Horace Mann Educators Corporation's CEO Compensation With the industry
Our data indicates that Horace Mann Educators Corporation has a market capitalization of US$1.7b, and total annual CEO compensation was reported as US$4.2m for the year to December 2019. We note that's an increase of 17% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$925k.
On comparing similar companies from the same industry with market caps ranging from US$1.0b to US$3.2b, we found that the median CEO total compensation was US$3.8m. This suggests that Horace Mann Educators remunerates its CEO largely in line with the industry average. What's more, Marita Zuraitis holds US$2.5m worth of shares in the company in their own name.
Speaking on an industry level, nearly 16% of total compensation represents salary, while the remainder of 84% is other remuneration. Horace Mann Educators is paying a higher share of its remuneration through a salary in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Horace Mann Educators Corporation's Growth Numbers
Horace Mann Educators Corporation has seen its earnings per share (EPS) increase by 22% a year over the past three years. Its revenue is down 7.3% over the previous year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Horace Mann Educators Corporation Been A Good Investment?
Horace Mann Educators Corporation has generated a total shareholder return of 5.5% over three years, so most shareholders wouldn't be too disappointed. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
As previously discussed, Marita is compensated close to the median for companies of its size, and which belong to the same industry. But EPS growth for the company has been strong over the last three years, though shareholder returns in comparison haven't been as impressive. As a result of these considerations, we would suggest the compensation is reasonable, but looking ahead shareholders will likely want to see healthier returns.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Horace Mann Educators that investors should be aware of in a dynamic business environment.
Important note: Horace Mann Educators is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.
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