Shareholders May Not Be So Generous With Atlantic American Corporation's (NASDAQ:AAME) CEO Compensation And Here's Why

Performance at Atlantic American Corporation (NASDAQ:AAME) has been reasonably good and CEO Hilton Howell has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 18 May 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for Atlantic American

Comparing Atlantic American Corporation's CEO Compensation With the industry

According to our data, Atlantic American Corporation has a market capitalization of US$80m, and paid its CEO total annual compensation worth US$1.3m over the year to December 2020. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at US$500k.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$361k. This suggests that Hilton Howell is paid more than the median for the industry. Furthermore, Hilton Howell directly owns US$3.5m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	US$500k	US$500k	39%
Other	US$783k	US$776k	61%
Total Compensation	US$1.3m	US$1.3m	100%

Talking in terms of the industry, salary represented approximately 16% of total compensation out of all the companies we analyzed, while other remuneration made up 84% of the pie. It's interesting to note that Atlantic American 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.

Atlantic American Corporation's Growth

Over the past three years, Atlantic American Corporation has seen its earnings per share (EPS) grow by 42% per year. In the last year, its revenue is down 1.3%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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.

Has Atlantic American Corporation Been A Good Investment?

Boasting a total shareholder return of 40% over three years, Atlantic American Corporation 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...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for Atlantic American (1 is significant!) that you should be aware of before investing here.

Important note: Atlantic American is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

When trading Atlantic American or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.