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How Much Is RenaissanceRe Holdings Ltd. (NYSE:RNR) CEO Getting Paid?

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Simply Wall St
·4 min read
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Kevin O'Donnell has been the CEO of RenaissanceRe Holdings Ltd. (NYSE:RNR) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for RenaissanceRe Holdings.

View our latest analysis for RenaissanceRe Holdings

How Does Total Compensation For Kevin O'Donnell Compare With Other Companies In The Industry?

At the time of writing, our data shows that RenaissanceRe Holdings Ltd. has a market capitalization of US$8.9b, and reported total annual CEO compensation of US$11m for the year to December 2019. This means that the compensation hasn't changed much from last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.

For comparison, other companies in the same industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$9.5m. So it looks like RenaissanceRe Holdings compensates Kevin O'Donnell in line with the median for the industry. Moreover, Kevin O'Donnell also holds US$38m worth of RenaissanceRe Holdings 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$1.1m

10%

Other

US$9.7m

US$9.7m

90%

Total Compensation

US$11m

US$11m

100%

On an industry level, around 16% of total compensation represents salary and 84% is other remuneration. In RenaissanceRe Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

RenaissanceRe Holdings Ltd.'s Growth

Over the past three years, RenaissanceRe Holdings Ltd. has seen its earnings per share (EPS) grow by 2.4% per year. It achieved revenue growth of 43% over the last year.

We like the look of the strong year-on-year improvement in revenue. Combined with modest EPS growth, we get a good impression of the company. We wouldn't say this is necessarily top notch growth, but it is certainly promising. 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 RenaissanceRe Holdings Ltd. Been A Good Investment?

With a total shareholder return of 27% over three years, RenaissanceRe Holdings Ltd. shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

As previously discussed, Kevin is compensated close to the median for companies of its size, and which belong to the same industry. However, EPS and total shareholder return are solid yet uninspiring. So, although the CEO compensation seems reasonable, shareholders might want to see some further progress before they agree that Kevin should get a raise.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for RenaissanceRe Holdings that investors should look into moving forward.

Switching gears from RenaissanceRe Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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.