It Looks Like The CEO Of QBE Insurance Group Limited (ASX:QBE) May Be Underpaid Compared To Peers

Key Insights

• QBE Insurance Group to hold its Annual General Meeting on 10th of May
• Total pay for CEO Andrew Horton includes US$1.24m salary
• Total compensation is 41% below industry average
• QBE Insurance Group's total shareholder return over the past three years was 77% while its EPS grew by 102% over the past three years

Shareholders will be pleased by the impressive results for QBE Insurance Group Limited (ASX:QBE) recently and CEO Andrew Horton has played a key role. At the upcoming AGM on 10th of May, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

View our latest analysis for QBE Insurance Group

How Does Total Compensation For Andrew Horton Compare With Other Companies In The Industry?

According to our data, QBE Insurance Group Limited has a market capitalization of AU$26b, and paid its CEO total annual compensation worth US$4.6m over the year to December 2023. This means that the compensation hasn't changed much from last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.2m.

In comparison with other companies in the Australian Insurance industry with market capitalizations over AU$12b, the reported median total CEO compensation was US$7.8m. Accordingly, QBE Insurance Group pays its CEO under the industry median. Moreover, Andrew Horton also holds AU$5.9m worth of QBE Insurance Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$1.2m	US$1.2m	27%
Other	US$3.3m	US$3.3m	73%
Total Compensation	US$4.6m	US$4.5m	100%

On an industry level, total compensation is equally proportioned between salary and other compensation, that is, they each represent approximately 50% of the total compensation. In QBE Insurance Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

QBE Insurance Group Limited's Growth

QBE Insurance Group Limited's earnings per share (EPS) grew 102% per year over the last three years. Its revenue is up 13% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has QBE Insurance Group Limited Been A Good Investment?

We think that the total shareholder return of 77%, over three years, would leave most QBE Insurance Group Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for QBE Insurance Group that investors should look into moving forward.

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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.