Here's Why Erie Indemnity Company's (NASDAQ:ERIE) CEO May Deserve A Raise

Key Insights

• Erie Indemnity to hold its Annual General Meeting on 23rd of April
• Total pay for CEO Tim NeCastro includes US$1.10m salary
• The overall pay is 49% below the industry average
• Erie Indemnity's total shareholder return over the past three years was 81% while its EPS grew by 15% over the past three years

The solid performance at Erie Indemnity Company (NASDAQ:ERIE) has been impressive and shareholders will probably be pleased to know that CEO Tim NeCastro has delivered. At the upcoming AGM on 23rd of April, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.

See our latest analysis for Erie Indemnity

How Does Total Compensation For Tim NeCastro Compare With Other Companies In The Industry?

At the time of writing, our data shows that Erie Indemnity Company has a market capitalization of US$20b, and reported total annual CEO compensation of US$7.8m for the year to December 2023. We note that's an increase of 73% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.

For comparison, other companies in the American Insurance industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$15m. This suggests that Tim NeCastro is paid below the industry median. Furthermore, Tim NeCastro directly owns US$5.8m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$1.1m	US$1.0m	14%
Other	US$6.7m	US$3.5m	86%
Total Compensation	US$7.8m	US$4.5m	100%

On an industry level, roughly 14% of total compensation represents salary and 86% is other remuneration. Our data reveals that Erie Indemnity allocates salary more or less in line with the wider market. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Erie Indemnity Company's Growth Numbers

Erie Indemnity Company's earnings per share (EPS) grew 15% per year over the last three years. In the last year, its revenue is up 15%.

Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Erie Indemnity Company Been A Good Investment?

Boasting a total shareholder return of 81% over three years, Erie Indemnity Company has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Erie Indemnity that investors should think about before committing capital to this stock.

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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.