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Is White Mountains Insurance Group, Ltd. (NYSE:WTM) Overpaying Its CEO?

Simply Wall St

In 2017 George Rountree was appointed CEO of White Mountains Insurance Group, Ltd. (NYSE:WTM). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for White Mountains Insurance Group

How Does George Rountree's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that White Mountains Insurance Group, Ltd. has a market cap of US$3.4b, and reported total annual CEO compensation of 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$5.1m.

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.

NYSE:WTM CEO Compensation, October 4th 2019

Is White Mountains Insurance Group, Ltd. Growing?

On average over the last three years, White Mountains Insurance Group, Ltd. has grown earnings per share (EPS) by 51% each year (using a line of best fit). In the last year, its revenue is up 110%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. 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 shareholders might want to examine this detailed historical graph 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 31% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

George Rountree is paid around what is normal the leaders of comparable size companies.

We would wish for better returns (whether dividends or capital gains) but we do admire the solid EPS growth on show here. As a result of these considerations, I would suggest the CEO pay is reasonable. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at White Mountains Insurance Group.

If you want to buy a stock that is better than White Mountains Insurance Group, this free list of high return, low debt companies is a great place to look.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.