Increases to CEO Compensation Might Be Put On Hold For Now at NI Holdings, Inc. (NASDAQ:NODK)

By
Simply Wall St
Published
May 18, 2021
NasdaqCM:NODK
Source: Shutterstock

Performance at NI Holdings, Inc. (NASDAQ:NODK) has been reasonably good and CEO Jim Alexander has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 25 May 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for NI Holdings

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

According to our data, NI Holdings, Inc. has a market capitalization of US$407m, and paid its CEO total annual compensation worth US$2.7m over the year to December 2020. That's a fairly small increase of 7.3% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$800k.

In comparison with other companies in the industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$1.8m. Hence, we can conclude that Jim Alexander is remunerated higher than the industry median. Furthermore, Jim Alexander directly owns US$1.5m worth of shares in the company.

Component20202019Proportion (2020)
Salary US$800k US$767k 30%
Other US$1.9m US$1.7m 70%
Total CompensationUS$2.7m US$2.5m100%

On an industry level, around 18% of total compensation represents salary and 82% is other remuneration. NI Holdings pays out 30% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
NasdaqCM:NODK CEO Compensation May 19th 2021

NI Holdings, Inc.'s Growth

Over the past three years, NI Holdings, Inc. has seen its earnings per share (EPS) grow by 47% per year. Its revenue is up 29% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 NI Holdings, Inc. Been A Good Investment?

NI Holdings, Inc. has served shareholders reasonably well, with a total return of 17% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling NI Holdings (free visualization of insider trades).

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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