Is Oxbridge Re Holdings Limited’s (NASDAQ:OXBR) CEO Overpaid Relative To Its Peers?

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In 2013 Jay Madhu was appointed CEO of Oxbridge Re Holdings Limited (NASDAQ:OXBR). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Oxbridge Re Holdings

How Does Jay Madhu’s Compensation Compare With Similar Sized Companies?

Our data indicates that Oxbridge Re Holdings Limited is worth US$6.7m, and total annual CEO compensation is US$239k. (This number is for the twelve months until December 2018). That’s actually a decrease on the year before. It is worth noting that the CEO compensation consists almost entirely of the salary, worth US$232k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$451k.

Most shareholders would consider it a positive that Jay Madhu takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

The graphic below shows how CEO compensation at Oxbridge Re Holdings has changed from year to year.

NasdaqCM:OXBR CEO Compensation, May 29th 2019
NasdaqCM:OXBR CEO Compensation, May 29th 2019

Is Oxbridge Re Holdings Limited Growing?

Oxbridge Re Holdings Limited has reduced its earnings per share by an average of 63% a year, over the last three years (measured with a line of best fit). Its revenue is down -83% over last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. Although we don’t have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Oxbridge Re Holdings Limited Been A Good Investment?

With a three year total loss of 73%, Oxbridge Re Holdings Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

It appears that Oxbridge Re Holdings Limited remunerates its CEO below most similar sized companies.

Jay Madhu is paid less than CEOs of similar size companies, but the company isn’t growing and total shareholder returns have been disappointing. Considering all these factors, we’d stop short of saying the CEO pay is too high, but we don’t think shareholders would want to see a pay rise before business performance improves. So you may want to check if insiders are buying Oxbridge Re Holdings shares with their own money (free access).

If you want to buy a stock that is better than Oxbridge Re Holdings, this free list of high return, low debt companies is a great place to look.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.