In 2001 Dominic Silvester was appointed CEO of Enstar Group Limited (NASDAQ:ESGR). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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 process should give us an idea about how appropriately the CEO is paid.
How Does Dominic Silvester's Compensation Compare With Similar Sized Companies?
Our data indicates that Enstar Group Limited is worth US$3.6b, and total annual CEO compensation is US$3.4m. (This number is for the twelve months until December 2018). While we always look at total compensation first, we note that the salary component is less, at US$2.5m. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.1m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at Enstar Group has changed from year to year.
Is Enstar Group Limited Growing?
On average over the last three years, Enstar Group Limited has shrunk earnings per share by 37% each year (measured with a line of best fit). In the last year, its revenue is up 76%.
Investors should note that, over three years, earnings per share are down. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Enstar Group Limited Been A Good Investment?
With a three year total loss of 0.9%, Enstar Group Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
It looks like Enstar Group Limited pays its CEO less than similar sized companies.
It's well worth noting that while Dominic Silvester is paid less than most company leaders (at similar sized companies), performance has been somewhat uninspiring, and total returns have been lacking. Many shareholders would probably like to see improvements, but our analysis does not suggest that CEO compensation is too generous. Shareholders may want to check for free if Enstar Group insiders are buying or selling shares.
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.
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If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.