Increases to Lancashire Holdings Limited's (LON:LRE) CEO Compensation Might Cool off for now

Performance at Lancashire Holdings Limited (LON:LRE) has been reasonably good and CEO Alex Maloney has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 28 April 2021. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Lancashire Holdings

Comparing Lancashire Holdings Limited's CEO Compensation With the industry

At the time of writing, our data shows that Lancashire Holdings Limited has a market capitalization of UK£1.6b, and reported total annual CEO compensation of US$4.1m for the year to December 2020. Notably, that's an increase of 35% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$896k.

For comparison, other companies in the same industry with market capitalizations ranging between UK£717m and UK£2.3b had a median total CEO compensation of US$1.9m. This suggests that Alex Maloney is paid more than the median for the industry. What's more, Alex Maloney holds UK£4.6m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	US$896k	US$867k	22%
Other	US$3.2m	US$2.2m	78%
Total Compensation	US$4.1m	US$3.1m	100%

Speaking on an industry level, nearly 39% of total compensation represents salary, while the remainder of 61% is other remuneration. In Lancashire Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Lancashire Holdings Limited's Growth Numbers

Over the past three years, Lancashire Holdings Limited has seen its earnings per share (EPS) grow by 74% per year. It achieved revenue growth of 11% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Lancashire Holdings Limited Been A Good Investment?

With a total shareholder return of 21% over three years, Lancashire Holdings Limited shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for Lancashire Holdings that you should be aware of before investing.

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. 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.
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