How Does ICC Holdings' (NASDAQ:ICCH) CEO Pay Compare With Company Performance?

By
Simply Wall St
Published
October 21, 2020
NasdaqCM:ICCH

This article will reflect on the compensation paid to Arron Sutherland who has served as CEO of ICC Holdings, Inc. (NASDAQ:ICCH) since 2016. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for ICC Holdings

How Does Total Compensation For Arron Sutherland Compare With Other Companies In The Industry?

At the time of writing, our data shows that ICC Holdings, Inc. has a market capitalization of US$38m, and reported total annual CEO compensation of US$589k for the year to December 2019. That's a notable increase of 11% on last year. Notably, the salary which is US$397.1k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$547k. So it looks like ICC Holdings compensates Arron Sutherland in line with the median for the industry. Furthermore, Arron Sutherland directly owns US$730k worth of shares in the company.

Component20192018Proportion (2019)
Salary US$397k US$361k 67%
Other US$192k US$170k 33%
Total CompensationUS$589k US$530k100%

On an industry level, around 16% of total compensation represents salary and 84% is other remuneration. It's interesting to note that ICC Holdings pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
NasdaqCM:ICCH CEO Compensation October 21st 2020

ICC Holdings, Inc.'s Growth

Earnings per share at ICC Holdings, Inc. are much the same as they were three years ago, albeit slightly lower. In the last year, its revenue changed by just 0.9%.

A lack of EPS improvement is not good to see. 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. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has ICC Holdings, Inc. Been A Good Investment?

Given the total shareholder loss of 28% over three years, many shareholders in ICC Holdings, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we noted earlier, ICC Holdings pays its CEO in line with similar-sized companies belonging to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for ICC Holdings (1 is significant!) that you should be aware of before investing here.

Switching gears from ICC Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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