Is Amerisafe, Inc.’s (NASDAQ:AMSF) CEO Pay Fair?

Gerry Frost has been the CEO of Amerisafe, Inc. (NASDAQ:AMSF) since 2015. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Amerisafe

How Does Gerry Frost’s Compensation Compare With Similar Sized Companies?

Our data indicates that Amerisafe, Inc. is worth US$1.3b, and total annual CEO compensation was reported as US$1.8m for the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$523k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$3.9m.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you’ll need to understand the business better before you can form an opinion.

You can see a visual representation of the CEO compensation at Amerisafe, below.

NasdaqGS:AMSF CEO Compensation, December 30th 2019
NasdaqGS:AMSF CEO Compensation, December 30th 2019

Is Amerisafe, Inc. Growing?

Earnings per share at Amerisafe, Inc. are much the same as they were three years ago, albeit slightly lower, based on the trend. In the last year, its revenue is down 1.3%.

The lack of earnings per share growth in the last three years is unimpressive. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.

Has Amerisafe, Inc. Been A Good Investment?

With a total shareholder return of 29% over three years, Amerisafe, Inc. shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary…

It appears that Amerisafe, Inc. remunerates its CEO below most similar sized companies.

Gerry Frost is remunerated more modestly than is a normal at similar sized companies. But the business isn’t growing earnings per share, and the returns to shareholders haven’t been wonderful. So while shareholders shouldn’t be overly concerned about CEO compensation, we suspect most would prefer see improved performance, before increasing pay. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Amerisafe.

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 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.

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