Hilton Howell has been the CEO of Atlantic American Corporation (NASDAQ:AAME) since 1995. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Hilton Howell’s Compensation Compare With Similar Sized Companies?
Our data indicates that Atlantic American Corporation is worth US$37m, and total annual CEO compensation was reported as US$1.1m for the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$500k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$509k.
As you can see, Hilton Howell is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Atlantic American Corporation is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance. We don’t have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
You can see, below, how CEO compensation at Atlantic American has changed over time.
Is Atlantic American Corporation Growing?
Over the last three years Atlantic American Corporation has shrunk its earnings per share by an average of 15% per year (measured with a line of best fit). It achieved revenue growth of 5.4% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
Has Atlantic American Corporation Been A Good Investment?
Since shareholders would have lost about 49% over three years, some Atlantic American Corporation shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
We compared the total CEO remuneration paid by Atlantic American Corporation, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
We think many shareholders would be underwhelmed with the business growth over the last three years. Just as bad, share price gains for investors have failed to materialize, over the same period. In our opinion the CEO might be paid too generously! Shareholders may want to check for free if Atlantic American insiders are buying or selling shares.
Important note: Atlantic American may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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.
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