Alan Schnitzer became the CEO of The Travelers Companies, Inc. (NYSE:TRV) in 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Alan Schnitzer’s Compensation Compare With Similar Sized Companies?
Our data indicates that The Travelers Companies, Inc. is worth US$34b, and total annual CEO compensation was reported as US$15m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$1.0m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts – even though some are quite a bit bigger than others).
Thus we can conclude that Alan Schnitzer receives more in total compensation than the median of a group of large companies in the same market as The Travelers Companies, Inc.. However, this doesn’t necessarily mean the pay is too high. 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 Travelers Companies, below.
Is The Travelers Companies, Inc. Growing?
Over the last three years, The Travelers Companies, Inc. has not seen its earnings per share change much, though there is a positive trend. Its revenue is up 4.3% over last year.
I’m not particularly impressed by the revenue growth, but I’m happy with the modest EPS growth. It’s clear the performance has been quite decent, but it it falls short of outstanding,based on this information. You might want to check this free visual report on analyst forecasts for future earnings.
Has The Travelers Companies, Inc. Been A Good Investment?
The Travelers Companies, Inc. has served shareholders reasonably well, with a total return of 23% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
We compared the total CEO remuneration paid by The Travelers Companies, Inc., and compared it to remuneration at a group of other large companies. We found that it pays well over the median amount paid in the benchmark group.
We generally prefer to see stronger EPS growth, and we’re not particularly impressed with the total shareholder return, over the last three years. In conclusion we think the company should definitely focus on improving the business before awarding any large pay rises. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Travelers Companies.
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 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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