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CEO Hilton Howell has done a decent job of delivering relatively good performance at Atlantic American Corporation (NASDAQ:AAME) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 18 May 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.
Comparing Atlantic American Corporation's CEO Compensation With the industry
Our data indicates that Atlantic American Corporation has a market capitalization of US$80m, and total annual CEO compensation was reported as US$1.3m for the year to December 2020. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$500k.
On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$361k. Accordingly, our analysis reveals that Atlantic American Corporation pays Hilton Howell north of the industry median. What's more, Hilton Howell holds US$3.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 16% of total compensation represents salary, while the remainder of 84% is other remuneration. Atlantic American 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.
Atlantic American Corporation's Growth
Over the past three years, Atlantic American Corporation has seen its earnings per share (EPS) grow by 42% per year. Its revenue is down 1.3% over the previous year.
This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Atlantic American Corporation Been A Good Investment?
Most shareholders would probably be pleased with Atlantic American Corporation for providing a total return of 40% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 3 warning signs for Atlantic American (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.
Important note: Atlantic American 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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