Is Insperity, Inc.’s (NYSE:NSP) CEO Being Overpaid?

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Paul Sarvadi has been the CEO of Insperity, Inc. (NYSE:NSP) since 1989. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Insperity

How Does Paul Sarvadi’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Insperity, Inc. has a market cap of US$5.0b, and is paying total annual CEO compensation of US$7.2m. (This is based on the year to December 2018). We note that’s an increase of 31% above last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.0m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$6.9m.

That means Paul Sarvadi receives fairly typical remuneration for the CEO of a company that size. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.

The graphic below shows how CEO compensation at Insperity has changed from year to year.

NYSE:NSP CEO Compensation, June 27th 2019
NYSE:NSP CEO Compensation, June 27th 2019

Is Insperity, Inc. Growing?

On average over the last three years, Insperity, Inc. has grown earnings per share (EPS) by 38% each year (using a line of best fit). It achieved revenue growth of 16% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing.

Has Insperity, Inc. Been A Good Investment?

Boasting a total shareholder return of 240% over three years, Insperity, Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary…

Paul Sarvadi is paid around the same as most CEOs of similar size companies.

Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. So one could argue the CEO compensation is quite modest, if you consider company performance! So you may want to check if insiders are buying Insperity shares with their own money (free access).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.