Key Things To Understand About Oxbridge Re Holdings' (NASDAQ:OXBR) CEO Pay Cheque

Jay Madhu became the CEO of Oxbridge Re Holdings Limited (NASDAQ:OXBR) in 2013, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Oxbridge Re Holdings.

See our latest analysis for Oxbridge Re Holdings

Comparing Oxbridge Re Holdings Limited's CEO Compensation With the industry

Our data indicates that Oxbridge Re Holdings Limited has a market capitalization of US$10m, and total annual CEO compensation was reported as US$310k for the year to December 2019. Notably, that's an increase of 30% over the year before. We note that the salary portion, which stands at US$232.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below US$200m, we found that the median total CEO compensation was US$547k. This suggests that Jay Madhu is paid below the industry median. Moreover, Jay Madhu also holds US$299k worth of Oxbridge Re Holdings stock directly under their own name.

Speaking on an industry level, nearly 16% of total compensation represents salary, while the remainder of 84% is other remuneration. Oxbridge Re Holdings pays out 75% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Oxbridge Re Holdings Limited's Growth Numbers

Over the past three years, Oxbridge Re Holdings Limited has seen its earnings per share (EPS) grow by 93% per year. It saw its revenue drop 51% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Oxbridge Re Holdings Limited Been A Good Investment?

Given the total shareholder loss of 18% over three years, many shareholders in Oxbridge Re Holdings Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As previously discussed, Jay is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. However we must not forget that the EPS growth has been very strong over three years. Although we would've liked to see positive investor returns, it would be bold of us to criticize CEO compensation when EPS are up. Shareholders, though, would ideally like to see shareholder returns head north before they agree to any raise.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 4 warning signs for Oxbridge Re Holdings you should be aware of, and 1 of them is a bit unpleasant.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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