It's Probably Less Likely That SelectQuote, Inc.'s (NYSE:SLQT) CEO Will See A Huge Pay Rise This Year
Key Insights
SelectQuote's Annual General Meeting to take place on 14th of November
Total pay for CEO Tim Danker includes US$525.0k salary
The total compensation is similar to the average for the industry
SelectQuote's EPS declined by 63% over the past three years while total shareholder loss over the past three years was 94%
In the past three years, the share price of SelectQuote, Inc. (NYSE:SLQT) has struggled to grow and now shareholders are sitting on a loss. Per share earnings growth is also lacking, despite revenue growth. Shareholders will have a chance to take their concerns to the board at the next AGM on 14th of November and vote on resolutions including executive compensation, which studies show may have an impact on company performance. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.
See our latest analysis for SelectQuote
How Does Total Compensation For Tim Danker Compare With Other Companies In The Industry?
Our data indicates that SelectQuote, Inc. has a market capitalization of US$213m, and total annual CEO compensation was reported as US$2.6m for the year to June 2023. That's a notable decrease of 16% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$525k.
On examining similar-sized companies in the American Insurance industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$2.3m. From this we gather that Tim Danker is paid around the median for CEOs in the industry. Moreover, Tim Danker also holds US$2.3m worth of SelectQuote stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$525k | US$525k | 20% |
Other | US$2.1m | US$2.6m | 80% |
Total Compensation | US$2.6m | US$3.2m | 100% |
On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. SelectQuote pays out 20% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at SelectQuote, Inc.'s Growth Numbers
Over the last three years, SelectQuote, Inc. has shrunk its earnings per share by 63% per year. Its revenue is up 39% over the last year.
The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has SelectQuote, Inc. Been A Good Investment?
The return of -94% over three years would not have pleased SelectQuote, Inc. shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. Shareholders will get the chance at the upcoming AGM to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 2 warning signs for SelectQuote that investors should be aware of in a dynamic business environment.
Switching gears from SelectQuote, 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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
