Mark Casale became the CEO of Essent Group Ltd. (NYSE:ESNT) in 2008. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Mark Casale’s Compensation Compare With Similar Sized Companies?
According to our data, Essent Group Ltd. has a market capitalization of US$4.3b, and pays its CEO total annual compensation worth US$6.6m. (This number is for the twelve months until December 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$900k. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$4.9m.
As you can see, Mark Casale is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Essent Group Ltd. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Essent Group has changed from year to year.
Is Essent Group Ltd. Growing?
Essent Group Ltd. has increased its earnings per share (EPS) by an average of 38% a year, over the last three years (using a line of best fit). Its revenue is up 25% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Essent Group Ltd. Been A Good Investment?
Boasting a total shareholder return of 122% over three years, Essent Group Ltd. has done well by shareholders. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
We examined the amount Essent Group Ltd. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. Shareholders may want to check for free if Essent Group insiders are buying or selling shares.
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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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.