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George Rountree became the CEO of White Mountains Insurance Group, Ltd. (NYSE:WTM) in 2017. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does George Rountree's Compensation Compare With Similar Sized Companies?
Our data indicates that White Mountains Insurance Group, Ltd. is worth US$3.0b, and total annual CEO compensation was reported as US$6.2m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$500k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$5.4m.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On a sector level, around 24% of total compensation represents salary and 76% is other remuneration. It's interesting to note that White Mountains Insurance Group allocates a smaller portion of compensation to salary in comparison to the broader industry.
So George Rountree receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance. The graphic below shows how CEO compensation at White Mountains Insurance Group has changed from year to year.
Is White Mountains Insurance Group, Ltd. Growing?
On average over the last three years, White Mountains Insurance Group, Ltd. has seen earnings per share (EPS) move in a favourable direction by 115% each year (using a line of best fit). It achieved revenue growth of 142% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has White Mountains Insurance Group, Ltd. Been A Good Investment?
White Mountains Insurance Group, Ltd. has generated a total shareholder return of 8.3% over three years, so most shareholders wouldn't be too disappointed. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
Remuneration for George Rountree is close enough to the median pay for a CEO of a similar sized company .
The company is growing EPS but shareholder returns have been sound but not amazing. So considering these factors, we think the CEO pay is probably quite reasonable. Looking into other areas, we've picked out 1 warning sign for White Mountains Insurance Group that investors should think about before committing capital to this stock.
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.
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.
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