In 2008 Michael Braun was appointed CEO of FedNat Holding Company (NASDAQ:FNHC). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does Michael Braun's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that FedNat Holding Company has a market cap of US$161m, and is paying total annual CEO compensation of US$2.4m. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$1.0m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$100m to US$400m. The median total CEO compensation was US$1.2m.
As you can see, Michael Braun is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean FedNat Holding Company is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at FedNat Holding, below.
Is FedNat Holding Company Growing?
Over the last three years FedNat Holding Company has shrunk its earnings per share by an average of 20% per year (measured with a line of best fit). Its revenue is up 3.2% over last year.
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 FedNat Holding Company Been A Good Investment?
Given the total loss of 38% over three years, many shareholders in FedNat Holding Company are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared the total CEO remuneration paid by FedNat Holding Company, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
Just as bad, share price gains for investors have failed to materialize, over the same period. This analysis suggests to us that the CEO is paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling FedNat Holding shares (free trial).
If you want to buy a stock that is better than FedNat Holding, 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 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. Thank you for reading.