How Much Is FedNat Holding Company (NASDAQ:FNHC) CEO Getting Paid?

Michael Braun became the CEO of FedNat Holding Company (NASDAQ:FNHC) in 2008, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for FedNat Holding.

See our latest analysis for FedNat Holding

How Does Total Compensation For Michael Braun Compare With Other Companies In The Industry?

According to our data, FedNat Holding Company has a market capitalization of US$146m, and paid its CEO total annual compensation worth US$1.7m over the year to December 2019. That's a notable decrease of 29% on last year. In particular, the salary of US$1.00m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$330k. Accordingly, our analysis reveals that FedNat Holding Company pays Michael Braun north of the industry median. Furthermore, Michael Braun directly owns US$6.9m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 17% of total compensation represents salary, while the remainder of 83% is other remuneration. According to our research, FedNat Holding has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

FedNat Holding Company's Growth

FedNat Holding Company's earnings per share (EPS) grew 21% per year over the last three years. Its revenue is up 6.2% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has FedNat Holding Company Been A Good Investment?

Given the total shareholder loss of 26% over three years, many shareholders in FedNat Holding Company are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we noted earlier, FedNat Holding pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But the company has impressed with its earnings per share growth, but it's disappointing to see negative shareholder returns over the same period. Although we'd stop short of calling it inappropriate, we think Michael is earning a very handsome sum.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 3 warning signs for FedNat Holding (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Important note: FedNat Holding is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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