A Look At Greenlight Capital Re's (NASDAQ:GLRE) CEO Remuneration

Simon Burton has been the CEO of Greenlight Capital Re, Ltd. (NASDAQ:GLRE) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Greenlight Capital Re

How Does Total Compensation For Simon Burton Compare With Other Companies In The Industry?

According to our data, Greenlight Capital Re, Ltd. has a market capitalization of US$252m, and paid its CEO total annual compensation worth US$1.3m over the year to December 2019. That's mostly flat as compared to the prior year's compensation. In particular, the salary of US$650.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies from the same industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$1.3m. This suggests that Greenlight Capital Re remunerates its CEO largely in line with the industry average. Moreover, Simon Burton also holds US$3.6m worth of Greenlight Capital Re stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 16% of total compensation represents salary and 84% is other remuneration. Greenlight Capital Re pays out 52% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Greenlight Capital Re, Ltd.'s Growth Numbers

Over the past three years, Greenlight Capital Re, Ltd. has seen its earnings per share (EPS) grow by 18% per year. In the last year, its revenue is down 19%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Greenlight Capital Re, Ltd. Been A Good Investment?

With a three year total loss of 64% for the shareholders, Greenlight Capital Re, Ltd. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we noted earlier, Greenlight Capital Re pays its CEO in line with similar-sized companies belonging to the same industry. At the same time, the company has logged negative shareholder returns over the last three years. But EPS growth is moving in a favorable direction, certainly a positive sign. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Greenlight Capital Re that investors should be aware of in a dynamic business environment.

Important note: Greenlight Capital Re 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.

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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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