Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Stephen A. Hester has been the CEO of RSA Insurance Group plc (LON:RSA) since 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for RSA Insurance Group
How Does Stephen A. Hester’s Compensation Compare With Similar Sized Companies?
According to our data, RSA Insurance Group plc has a market capitalization of UK£5.7b, and pays its CEO total annual compensation worth UK£4.1m. (This number is for the twelve months until December 2018). That’s less than last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at UK£1.0m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of UK£3.1b to UK£9.2b. The median total CEO compensation was UK£2.5m.
It would therefore appear that RSA Insurance Group plc pays Stephen A. Hester more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at RSA Insurance Group has changed over time.
Is RSA Insurance Group plc Growing?
RSA Insurance Group plc has increased its earnings per share (EPS) by an average of 55% a year, over the last three years (using a line of best fit). Its revenue is down -1.3% over last year.
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. You might want to check this free visual report on analyst forecasts for future earnings.
Has RSA Insurance Group plc Been A Good Investment?
RSA Insurance Group plc has generated a total shareholder return of 30% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary…
We compared the total CEO remuneration paid by RSA Insurance Group plc, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Looking at the same time period, we think that the shareholder returns are respectable. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we’d recommend further research on management. So you may want to check if insiders are buying RSA Insurance Group shares with their own money (free access).
If you want to buy a stock that is better than RSA Insurance Group, this free list of high return, low debt companies is a great place to look.
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.