Scott Stephenson became the CEO of Verisk Analytics, Inc. (NASDAQ:VRSK) in 2013, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Verisk Analytics pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Verisk Analytics, Inc.'s CEO Compensation With the industry
According to our data, Verisk Analytics, Inc. has a market capitalization of US$32b, and paid its CEO total annual compensation worth US$9.1m over the year to December 2019. We note that's an increase of 17% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.
In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$14m. In other words, Verisk Analytics pays its CEO lower than the industry median. Furthermore, Scott Stephenson directly owns US$161m worth of shares in the company, implying that they are deeply invested in the company's success.
Talking in terms of the industry, salary represented approximately 21% of total compensation out of all the companies we analyzed, while other remuneration made up 79% of the pie. Verisk Analytics sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Verisk Analytics, Inc.'s Growth
Verisk Analytics, Inc.'s earnings per share (EPS) grew 14% per year over the last three years. It achieved revenue growth of 8.0% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Verisk Analytics, Inc. Been A Good Investment?
We think that the total shareholder return of 106%, over three years, would leave most Verisk Analytics, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As we touched on above, Verisk Analytics, Inc. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Considering robust EPS growth, we believe Scott to be modestly paid. Plus, we can't ignore the impressive shareholder returns, and won't be surprised if some shareholders were to reward such excellent all-around performance with a raise.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Verisk Analytics that investors should think about before committing capital to this stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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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