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In 2001 Dominic Silvester was appointed CEO of Enstar Group Limited (NASDAQ:ESGR). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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 method should give us information to assess how appropriately the company pays the CEO.
How Does Dominic Silvester’s Compensation Compare With Similar Sized Companies?
Our data indicates that Enstar Group Limited is worth US$3.8b, and total annual CEO compensation is US$3.4m. (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$2.5m. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.2m.
Most shareholders would consider it a positive that Dominic Silvester takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at Enstar Group has changed from year to year.
Is Enstar Group Limited Growing?
Enstar Group Limited has reduced its earnings per share by an average of 37% a year, over the last three years (measured with a line of best fit). Its revenue is up 76% over last year.
Investors should note that, over three years, earnings per share are down. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. These two metric are moving in different directions, so while it’s hard to be confident judging performance, we think the stock is worth watching.
Has Enstar Group Limited Been A Good Investment?
Enstar Group Limited has not done too badly by shareholders, with a total return of 9.0%, over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
It appears that Enstar Group Limited remunerates its CEO below most similar sized companies.
It’s well worth noting that while Dominic Silvester is paid less than most company leaders (at companies of similar size), share price performance has been somewhat uninspiring. But on this analysis I see no issue with the CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Enstar Group (free visualization of insider trades).
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 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.