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Should You Worry About Argo Group International Holdings, Ltd.'s (NYSE:ARGO) CEO Pay?

Simply Wall St

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Mark Watson has been the CEO of Argo Group International Holdings, Ltd. (NYSE:ARGO) since 2000. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Argo Group International Holdings

How Does Mark Watson's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Argo Group International Holdings, Ltd. has a market cap of US$2.6b, and is paying total annual CEO compensation of US$8.3m. (This figure is for the year to December 2018). Notably, that's an increase of 182% over the year before. While we always look at total compensation first, we note that the salary component is less, at US$1.1m. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.2m.

As you can see, Mark Watson is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Argo Group International Holdings, Ltd. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see, below, how CEO compensation at Argo Group International Holdings has changed over time.

NYSE:ARGO CEO Compensation, June 20th 2019

Is Argo Group International Holdings, Ltd. Growing?

On average over the last three years, Argo Group International Holdings, Ltd. has shrunk earnings per share by 22% each year (measured with a line of best fit). In the last year, its revenue is up 5.1%.

Unfortunately, earnings per share have trended lower over the last three years. The fairly low revenue growth fails to impress given that the earnings per share is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has Argo Group International Holdings, Ltd. Been A Good Investment?

I think that the total shareholder return of 77%, over three years, would leave most Argo Group International Holdings, Ltd. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

We compared total CEO remuneration at Argo Group International Holdings, Ltd. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us.

On the other hand, returns have been good, so the company is doing something right. So on this analysis we'd stop short of criticizing the level of CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Argo Group International Holdings.

Important note: Argo Group International Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.