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Albert Benchimol has been the CEO of AXIS Capital Holdings Limited (NYSE:AXS) since 2012. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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 Albert Benchimol’s Compensation Compare With Similar Sized Companies?
According to our data, AXIS Capital Holdings Limited has a market capitalization of US$4.6b, and pays its CEO total annual compensation worth US$7.0m. (This number is for the twelve months until 2017). 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 compensation of that group was US$4.8m.
As you can see, Albert Benchimol is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean AXIS Capital Holdings Limited is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at AXIS Capital Holdings has changed over time.
Is AXIS Capital Holdings Limited Growing?
Over the last three years AXIS Capital Holdings Limited has shrunk its earnings per share by an average of 77% per year (measured with a line of best fit). It achieved revenue growth of 11% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has AXIS Capital Holdings Limited Been A Good Investment?
With a total shareholder return of 15% over three years, AXIS Capital Holdings Limited shareholders would, in general, 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.
We examined the amount AXIS Capital Holdings Limited pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
While shareholder returns are acceptable, they don’t delight. So we think more research is needed, but we don’t think the CEO underpaid. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling AXIS Capital Holdings (free visualization of insider trades).
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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.