Shareholders May Not Be So Generous With National Western Life Group, Inc.'s (NASDAQ:NWLI) CEO Compensation And Here's Why

In the past three years, the share price of National Western Life Group, Inc. (NASDAQ:NWLI) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 18 June 2021. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for National Western Life Group

Comparing National Western Life Group, Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that National Western Life Group, Inc. has a market capitalization of US$832m, and reported total annual CEO compensation of US$11m for the year to December 2020. Notably, that's an increase of 14% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.1m.

In comparison with other companies in the industry with market capitalizations ranging from US$400m to US$1.6b, the reported median CEO total compensation was US$2.8m. Accordingly, our analysis reveals that National Western Life Group, Inc. pays Ross Moody north of the industry median. Moreover, Ross Moody also holds US$916k worth of National Western Life Group stock directly under their own name.

Component	2020	2019	Proportion (2020)
Salary	US$1.1m	US$1.0m	9%
Other	US$10m	US$8.7m	91%
Total Compensation	US$11m	US$9.8m	100%

On an industry level, around 18% of total compensation represents salary and 82% is other remuneration. National Western Life Group pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at National Western Life Group, Inc.'s Growth Numbers

National Western Life Group, Inc.'s earnings per share (EPS) grew 11% per year over the last three years. In the last year, its revenue is up 33%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 National Western Life Group, Inc. Been A Good Investment?

Since shareholders would have lost about 27% over three years, some National Western Life Group, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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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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