Here's Why Shareholders May Want To Be Cautious With Increasing Conifer Holdings, Inc.'s (NASDAQ:CNFR) CEO Pay Packet

Shareholders of Conifer Holdings, Inc. (NASDAQ:CNFR) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 19 May 2021. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for Conifer Holdings

Comparing Conifer Holdings, Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that Conifer Holdings, Inc. has a market capitalization of US$27m, and reported total annual CEO compensation of US$561k for the year to December 2020. This was the same as last year. Notably, the salary which is US$550.0k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$361k. Hence, we can conclude that Jim Petcoff is remunerated higher than the industry median. Furthermore, Jim Petcoff directly owns US$7.2m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	US$550k	US$550k	98%
Other	US$11k	US$11k	2%
Total Compensation	US$561k	US$561k	100%

On an industry level, roughly 17% of total compensation represents salary and 83% is other remuneration. Conifer Holdings is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Conifer Holdings, Inc.'s Growth Numbers

Over the past three years, Conifer Holdings, Inc. has seen its earnings per share (EPS) grow by 53% per year. It achieved revenue growth of 7.6% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Conifer Holdings, Inc. Been A Good Investment?

Few Conifer Holdings, Inc. shareholders would feel satisfied with the return of -55% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Conifer Holdings pays its CEO a majority of compensation through a salary. The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 4 warning signs for Conifer Holdings you should be aware of, and 1 of them is a bit concerning.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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.
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