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Why We Think Shareholders May Be Considering Bumping Up Kinsale Capital Group, Inc.'s (NASDAQ:KNSL) CEO Compensation

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·3 min read
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Shareholders will be pleased by the impressive results for Kinsale Capital Group, Inc. (NASDAQ:KNSL) recently and CEO Michael Kehoe has played a key role. This would be kept in mind at the upcoming AGM on 27 May 2021 which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

See our latest analysis for Kinsale Capital Group

How Does Total Compensation For Michael Kehoe Compare With Other Companies In The Industry?

At the time of writing, our data shows that Kinsale Capital Group, Inc. has a market capitalization of US$3.6b, and reported total annual CEO compensation of US$2.2m for the year to December 2020. That's a notable increase of 10.0% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$592k.

On comparing similar companies from the same industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$6.7m. This suggests that Michael Kehoe is paid below the industry median. Furthermore, Michael Kehoe directly owns US$157m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2020

2019

Proportion (2020)

Salary

US$592k

US$542k

27%

Other

US$1.6m

US$1.5m

73%

Total Compensation

US$2.2m

US$2.0m

100%

Talking in terms of the industry, salary represented approximately 18% of total compensation out of all the companies we analyzed, while other remuneration made up 82% of the pie. Kinsale Capital Group 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.

ceo-compensation
ceo-compensation

A Look at Kinsale Capital Group, Inc.'s Growth Numbers

Kinsale Capital Group, Inc. has seen its earnings per share (EPS) increase by 61% a year over the past three years. In the last year, its revenue is up 60%.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Kinsale Capital Group, Inc. Been A Good Investment?

We think that the total shareholder return of 202%, over three years, would leave most Kinsale Capital Group, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Kinsale Capital Group that investors should be aware of in a dynamic business environment.

Important note: Kinsale Capital Group 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.