Is Atlas Financial Holdings, Inc.’s (NASDAQ:AFH) CEO Paid Enough Relative To Peers?

Scott Wollney became the CEO of Atlas Financial Holdings, Inc. (NASDAQ:AFH) in 2010. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Atlas Financial Holdings

How Does Scott Wollney’s Compensation Compare With Similar Sized Companies?

According to our data, Atlas Financial Holdings, Inc. has a market capitalization of US$31m, and pays its CEO total annual compensation worth US$583k. (This is based on the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$450k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$419k.

It would therefore appear that Atlas Financial Holdings, Inc. pays Scott Wollney more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see, below, how CEO compensation at Atlas Financial Holdings has changed over time.

NasdaqGM:AFH CEO Compensation, March 13th 2019
NasdaqGM:AFH CEO Compensation, March 13th 2019

Is Atlas Financial Holdings, Inc. Growing?

Over the last three years Atlas Financial Holdings, Inc. has shrunk its earnings per share by an average of 113% per year (measured with a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the flat revenue is seriously uninspiring. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.

Has Atlas Financial Holdings, Inc. Been A Good Investment?

With a three year total loss of 85%, Atlas Financial Holdings, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

We compared the total CEO remuneration paid by Atlas Financial Holdings, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us.

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! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Atlas Financial Holdings.

Important note: Atlas Financial Holdings 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.

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.