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Hilton Howell has been the CEO of Atlantic American Corporation (NASDAQ:AAME) since 1995. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. 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 Hilton Howell’s Compensation Compare With Similar Sized Companies?
Our data indicates that Atlantic American Corporation is worth US$48m, and total annual CEO compensation is US$3.2m. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$500k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$462k.
As you can see, Hilton Howell is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Atlantic American Corporation is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Atlantic American has changed from year to year.
Is Atlantic American Corporation Growing?
Atlantic American Corporation has increased its earnings per share (EPS) by an average of 7.8% a year, over the last three years (using a line of best fit). Its revenue is up 13% over last year.
I think the revenue growth is good. And, while modest, the earnings per share growth is noticeable. So while performance isn’t amazing, we think it really does seem quite respectable.
Has Atlantic American Corporation Been A Good Investment?
Since shareholders would have lost about 41% over three years, some Atlantic American Corporation shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
We examined the amount Atlantic American Corporation pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Shareholders may wish to consider further research. Although we don’t think the CEO pay is too high, it is probably more on the generous side of things. So you may want to check if insiders are buying Atlantic American shares with their own money (free access).
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.
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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.