Here's Why Investors Title Company's (NASDAQ:ITIC) CEO May Have Their Pay Bumped Up

The decent performance at Investors Title Company (NASDAQ:ITIC) recently will please most shareholders as they go into the AGM coming up on 19 May 2021. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. We have prepared some analysis below and we show why we think CEO compensation looks decent with even the possibility for a raise.

See our latest analysis for Investors Title

Comparing Investors Title Company's CEO Compensation With the industry

Our data indicates that Investors Title Company has a market capitalization of US$338m, and total annual CEO compensation was reported as US$1.4m for the year to December 2020. Notably, that's an increase of 13% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$453k.

On examining similar-sized companies in the industry with market capitalizations between US$200m and US$800m, we discovered that the median CEO total compensation of that group was US$2.0m. Accordingly, Investors Title pays its CEO under the industry median. Furthermore, James Fine directly owns US$36m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	US$453k	US$438k	32%
Other	US$963k	US$815k	68%
Total Compensation	US$1.4m	US$1.3m	100%

On an industry level, around 17% of total compensation represents salary and 83% is other remuneration. According to our research, Investors Title has allocated a higher percentage of pay to salary in comparison to the wider industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Investors Title Company's Growth Numbers

Investors Title Company has seen its earnings per share (EPS) increase by 33% a year over the past three years. Its revenue is up 61% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Investors Title Company Been A Good Investment?

Investors Title Company has generated a total shareholder return of 19% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

Overall, the company hasn't done too poorly performance-wise, but we would like to see some improvement. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. Rather, investors would more likely want to engage on discussions related to key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Investors Title that investors should be aware of in a dynamic business environment.

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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