Does Tiptree Inc.’s (NASDAQ:TIPT) CEO Pay Compare Well With Peers?

Jonathan Ilany has been the CEO of Tiptree Inc. (NASDAQ:TIPT) since 2015. First, this article will compare CEO compensation with compensation at similar sized companies. 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.

View our latest analysis for Tiptree

How Does Jonathan Ilany’s Compensation Compare With Similar Sized Companies?

According to our data, Tiptree Inc. has a market capitalization of US$225m, and pays its CEO total annual compensation worth US$2.2m. (This figure is for the year to December 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$600k. We looked at a group of companies with market capitalizations from US$100m to US$400m, and the median CEO total compensation was US$1.2m.

As you can see, Jonathan Ilany is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Tiptree Inc. 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 Tiptree, below.

NasdaqCM:TIPT CEO Compensation, August 7th 2019
NasdaqCM:TIPT CEO Compensation, August 7th 2019

Is Tiptree Inc. Growing?

On average over the last three years, Tiptree Inc. has shrunk earnings per share by 80% each year (measured with a line of best fit). It achieved revenue growth of 16% over the last year.

Sadly for shareholders, earnings per share are actually down, over three years. There’s no doubt that the silver lining is that revenue is up. But it isn’t sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.

Has Tiptree Inc. Been A Good Investment?

Most shareholders would probably be pleased with Tiptree Inc. for providing a total return of 36% over three years. 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 the total CEO remuneration paid by Tiptree Inc., and compared it to remuneration at a group of similar sized companies. 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.

However, we can’t argue with the strong returns to shareholders, over the same time period. So on this analysis we’d stop short of criticizing the level of CEO compensation. Shareholders may want to check for free if Tiptree insiders are buying or selling shares.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.