Is Lancashire Holdings Limited’s (LON:LRE) CEO Paid At A Competitive Rate?

Alex Maloney has been the CEO of Lancashire Holdings Limited (LON:LRE) since 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

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View our latest analysis for Lancashire Holdings

How Does Alex Maloney’s Compensation Compare With Similar Sized Companies?

Our data indicates that Lancashire Holdings Limited is worth UK£1.4b, and total annual CEO compensation is US$1.4m. (This figure is for the year to December 2018). That’s actually a decrease on the year before. While we always look at total compensation first, we note that the salary component is less, at US$847k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$1.8m.

So Alex Maloney receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.

You can see a visual representation of the CEO compensation at Lancashire Holdings, below.

LSE:LRE CEO Compensation, May 21st 2019
LSE:LRE CEO Compensation, May 21st 2019

Is Lancashire Holdings Limited Growing?

Over the last three years Lancashire Holdings Limited has shrunk its earnings per share by an average of 72% per year (measured with a line of best fit). In the last year, its revenue is down -6.8%.

Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has Lancashire Holdings Limited Been A Good Investment?

Boasting a total shareholder return of 41% over three years, Lancashire Holdings Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

Alex Maloney is paid around the same as most CEOs of similar size companies.

The company isn’t growing earnings per share, but shareholder returns have been strong over the last three years. So we doubt many are complaining about the fairly normal CEO pay. Whatever your view on compensation, you might want to check if insiders are buying or selling Lancashire Holdings shares (free trial).

Important note: Lancashire Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.