Here's Why Shareholders May Consider Paying SEI Investments Company's (NASDAQ:SEIC) CEO A Little More

Shareholders will probably not be disappointed by the robust results at SEI Investments Company (NASDAQ:SEIC) recently and they will be keeping this in mind as they go into the AGM on 02 June 2021. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. Here is our take on why we think CEO compensation is fair and may even warrant a raise.

Check out our latest analysis for SEI Investments

How Does Total Compensation For Al West Compare With Other Companies In The Industry?

According to our data, SEI Investments Company has a market capitalization of US$9.0b, and paid its CEO total annual compensation worth US$2.9m over the year to December 2020. We note that's an increase of 29% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$779k.

On examining similar-sized companies in the industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$7.6m. Accordingly, SEI Investments pays its CEO under the industry median. Moreover, Al West also holds US$1.2b worth of SEI Investments stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	US$779k	US$750k	27%
Other	US$2.2m	US$1.5m	73%
Total Compensation	US$2.9m	US$2.3m	100%

Talking in terms of the industry, salary represented approximately 13% of total compensation out of all the companies we analyzed, while other remuneration made up 87% of the pie. It's interesting to note that SEI Investments pays out a greater portion of remuneration through salary, compared to the industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

SEI Investments Company's Growth

SEI Investments Company's earnings per share (EPS) grew 3.7% per year over the last three years. Its revenue is up 3.7% over the last year.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. 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 SEI Investments Company Been A Good Investment?

With a total shareholder return of 0.2% over three years, SEI Investments Company has done okay by shareholders, but there's always room for improvement. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

In Summary...

Overall, the company hasn't done too poorly performance-wise, but we would like to see some improvement. If it manages to keep up the current streak, CEO remuneration could well be one of shareholders' least concerns. Rather, investors would more likely want to engage on discussions related to key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

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. We've identified 1 warning sign for SEI Investments that investors should be aware of in a dynamic business environment.

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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