Bill Brunson became the CEO of The National Security Group, Inc. (NASDAQ:NSEC) in 2000. 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. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Bill Brunson’s Compensation Compare With Similar Sized Companies?
Our data indicates that The National Security Group, Inc. is worth US$40m, and total annual CEO compensation was reported as US$330k for the year to December 2019. That’s less than last year. We think total compensation is more important but we note that the CEO salary is lower, at US$257k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$615k.
Now let’s take a look at the pay mix on an industry and company level to gain a better understanding of where National Security Group stands. On an industry level, roughly 18% of total compensation represents salary and 82% is other remuneration. National Security Group pays out 78% of aggregate payment in the shape of a salary, which is significantly higher than the industry average.
Most shareholders would consider it a positive that Bill Brunson takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it’s important we delve into the performance of the actual business. You can see a visual representation of the CEO compensation at National Security Group, below.
Is The National Security Group, Inc. Growing?
Over the last three years The National Security Group, Inc. has seen earnings per share (EPS) move in a positive direction by an average of 41% per year (using a line of best fit). In the last year, its revenue is up 3.9%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see modest revenue growth, suggesting the underlying business is healthy. Although we don’t have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has The National Security Group, Inc. Been A Good Investment?
With a total shareholder return of 9.6% over three years, The National Security Group, Inc. has done okay by shareholders. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
The National Security Group, Inc. is currently paying its CEO below what is normal for companies of its size.
Since the business is growing, many would argue this suggests the pay is modest. While some might be keen on seeing higher returns, our short analysis has not produced any evidence to suggest Bill Brunson is overcompensated. It’s good to see reasonable payment of the CEO, even while the business improves. But it would be nice if insiders were also buying shares. CEO compensation is an important area to keep your eyes on, but we’ve also identified 2 warning signs for National Security Group (1 is potentially serious!) that you should be aware of before investing here.
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.
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.
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