Is Amerisafe, Inc.’s (NASDAQ:AMSF) CEO Pay Justified?

Gerry Frost has been the CEO of Amerisafe, Inc. (NASDAQ:AMSF) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.

View our latest analysis for Amerisafe

How Does Gerry Frost’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Amerisafe, Inc. has a market cap of US$1.1b, and is paying total annual CEO compensation of US$1.9m. (This is based on the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at US$504k. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$2.3m.

That means Gerry Frost receives fairly typical remuneration for the CEO of a company that size. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at Amerisafe has changed from year to year.

NasdaqGS:AMSF CEO Compensation, April 19th 2019
NasdaqGS:AMSF CEO Compensation, April 19th 2019

Is Amerisafe, Inc. Growing?

Over the last three years Amerisafe, Inc. has shrunk its earnings per share by an average of 14% per year (measured with a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.

Sadly for shareholders, earnings per share are actually down, over three years. And the flat revenue hardly impresses. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.

Has Amerisafe, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Amerisafe, Inc. for providing a total return of 38% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

Gerry Frost is paid around the same as most CEOs of similar size companies.

The company isn’t growing earnings per share, but shareholder returns have been strong over the last three years. So we think most shareholders wouldn’t be too worried about CEO compensation, which is close to the median for similar sized companies. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Amerisafe.

If you want to buy a stock that is better than Amerisafe, this free list of high return, low debt companies is a great place to look.

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.