We Think The Compensation For Enact Holdings, Inc.'s (NASDAQ:ACT) CEO Looks About Right
Key Insights
- Enact Holdings' Annual General Meeting to take place on 14th of May
- Salary of US$985.6k is part of CEO Rohit Gupta's total remuneration
- The overall pay is comparable to the industry average
- Enact Holdings' total shareholder return over the past three years was 86% while its EPS grew by 8.6% over the past three years
CEO Rohit Gupta has done a decent job of delivering relatively good performance at Enact Holdings, Inc. (NASDAQ:ACT) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 14th of May. We present our case of why we think CEO compensation looks fair.
See our latest analysis for Enact Holdings
Comparing Enact Holdings, Inc.'s CEO Compensation With The Industry
Our data indicates that Enact Holdings, Inc. has a market capitalization of US$5.5b, and total annual CEO compensation was reported as US$10.0m for the year to December 2024. We note that's an increase of 23% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$986k.
On examining similar-sized companies in the American Diversified Financial industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$10m. This suggests that Enact Holdings remunerates its CEO largely in line with the industry average. Furthermore, Rohit Gupta directly owns US$15m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | US$986k | US$925k | 10% |
| Other | US$9.0m | US$7.2m | 90% |
| Total Compensation | US$10.0m | US$8.1m | 100% |
Speaking on an industry level, nearly 12% of total compensation represents salary, while the remainder of 88% is other remuneration. Enact Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Enact Holdings, Inc.'s Growth Numbers
Enact Holdings, Inc.'s earnings per share (EPS) grew 8.6% per year over the last three years. In the last year, its revenue is up 4.5%.
We're not particularly impressed by the revenue growth, but we're happy with the modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Enact Holdings, Inc. Been A Good Investment?
We think that the total shareholder return of 86%, over three years, would leave most Enact Holdings, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 3 warning signs for Enact Holdings (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.
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.
Valuation is complex, but we're here to simplify it.
Discover if Enact Holdings might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.