Gabe Tirador became the CEO of Mercury General Corporation (NYSE:MCY) in 2007. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Gabe Tirador’s Compensation Compare With Similar Sized Companies?
According to our data, Mercury General Corporation has a market capitalization of US$2.7b, and paid its CEO total annual compensation worth US$1.5m over the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.0m. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.1m.
A first glance this seems like a real positive for shareholders, since Gabe Tirador is paid less than the average total compensation paid by similar sized companies. Though positive, it’s important we delve into the performance of the actual business. It could be important to check this free visual depiction of what analysts expect for the future.
You can see, below, how CEO compensation at Mercury General has changed over time.
Is Mercury General Corporation Growing?
On average over the last three years, Mercury General Corporation has grown earnings per share (EPS) by 23% each year (using a line of best fit). Its revenue is up 11% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing.
Has Mercury General Corporation Been A Good Investment?
Since shareholders would have lost about 3.7% over three years, some Mercury General Corporation shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
It looks like Mercury General Corporation pays its CEO less than similar sized companies.
Considering the underlying business is growing earnings, this would suggest the pay is modest. Unfortunately, some shareholders may be disappointed with their returns, given the company’s performance over the last three years. We’re not critical of the remuneration Gabe Tirador receives, but it would be good to see improved returns to shareholders before the remuneration grows too much. When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Mercury General (free visualization of insider trades).
Important note: Mercury General 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.
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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