Is Argo Group Limited’s (LON:ARGO) CEO Pay Justified?

The CEO of Argo Group Limited (LON:ARGO) is Kyriakos Rialas. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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.

View our latest analysis for Argo Group

How Does Kyriakos Rialas’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Argo Group Limited has a market cap of UK£8.0m, and is paying total annual CEO compensation of US$219k. (This figure is for the year to December 2018). Notably, the salary of US$219k is the vast majority of the CEO compensation. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$314k.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it’s important we delve into the performance of the actual business.

The graphic below shows how CEO compensation at Argo Group has changed from year to year.

AIM:ARGO CEO Compensation, March 20th 2019
AIM:ARGO CEO Compensation, March 20th 2019

Is Argo Group Limited Growing?

Over the last three years Argo Group Limited has grown its earnings per share (EPS) by an average of 13% per year (using a line of best fit). In the last year, its revenue is down -55%.

This shows that the company has improved itself over the last few years. Good news for shareholders. While it would be good to see revenue growth, profits matter more in the end. Although we don’t have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Argo Group Limited Been A Good Investment?

Most shareholders would probably be pleased with Argo Group Limited for providing a total return of 93% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

It appears that Argo Group Limited remunerates its CEO below most similar sized companies. Many would consider this to indicate that the pay is modest since the business is growing. The pleasing shareholder returns are the cherry on top; you might even consider that Kyriakos Rialas deserves a raise!

Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. Shareholders may want to check for free if Argo Group insiders are buying or selling shares.

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 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. Thank you for reading.