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Jonathan Ilany became the CEO of Tiptree Inc. (NASDAQ:TIPT) in 2015. 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. This process should give us an idea about how appropriately the CEO is paid.
How Does Jonathan Ilany's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Tiptree Inc. has a market cap of US$217m, and is paying total annual CEO compensation of US$2.2m. (This figure is for the year to December 2018). That's less than last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$600k. 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.
Thus we can conclude that Jonathan Ilany receives more in total compensation than the median of a group of companies in the same market, and of similar size to Tiptree Inc.. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Tiptree has changed from year to year.
Is Tiptree Inc. Growing?
Tiptree Inc. has reduced its earnings per share by an average of 61% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 10%.
Sadly for shareholders, earnings per share are actually down, over three years. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for me to put aside my concerns around earnings. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Tiptree Inc. Been A Good Investment?
Tiptree Inc. has generated a total shareholder return of 33% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
We compared total CEO remuneration at Tiptree Inc. with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
While shareholder returns are acceptable, they don't delight. So we doubt many shareholders would consider the CEO pay to be particularly modest! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Tiptree.
Important note: Tiptree 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 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.