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Our View On Verisk Analytics' (NASDAQ:VRSK) CEO Pay

Simply Wall St

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Scott Stephenson has been the CEO of Verisk Analytics, Inc. (NASDAQ:VRSK) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Verisk Analytics pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Verisk Analytics

How Does Total Compensation For Scott Stephenson Compare With Other Companies In The Industry?

Our data indicates that Verisk Analytics, Inc. has a market capitalization of US$28b, and total annual CEO compensation was reported as US$9.1m for the year to December 2019. We note that's an increase of 17% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.

In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$14m. In other words, Verisk Analytics pays its CEO lower than the industry median. What's more, Scott Stephenson holds US$145m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2019

2018

Proportion (2019)

Salary

US$1.0m

US$1.0m

11%

Other

US$8.1m

US$6.7m

89%

Total Compensation

US$9.1m

US$7.7m

100%

On an industry level, around 19% of total compensation represents salary and 81% is other remuneration. It's interesting to note that Verisk Analytics allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

A Look at Verisk Analytics, Inc.'s Growth Numbers

Verisk Analytics, Inc.'s earnings per share (EPS) grew 3.5% per year over the last three years. It achieved revenue growth of 9.5% over the last year.

We'd prefer higher revenue growth, but we're happy with the modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. 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 Verisk Analytics, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Verisk Analytics, Inc. for providing a total return of 105% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

As previously discussed, Scott is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, shareholder returns are rock solid over the past three years, and that’s undoubtedly a good sign. As a result of the juicy return to investors, CEO compensation may well be quite reasonable.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Verisk Analytics that you should be aware of before investing.

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.

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.