This Is Why Shareholders Will Hold Back On A Pay Rise For Safety Insurance Group, Inc.'s (NASDAQ:SAFT) CEO This Year

Key Insights

• Safety Insurance Group will host its Annual General Meeting on 14th of May
• Total pay for CEO George Murphy includes US$800.0k salary
• The overall pay is comparable to the industry average
• Safety Insurance Group's total shareholder return over the past three years was 3.6% while its EPS was down 19% over the past three years

We've discovered 1 warning sign about Safety Insurance Group. View them for free.

CEO George Murphy has done a decent job of delivering relatively good performance at Safety Insurance Group, Inc. (NASDAQ:SAFT) recently. 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 14th of May. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

Check out our latest analysis for Safety Insurance Group

How Does Total Compensation For George Murphy Compare With Other Companies In The Industry?

Our data indicates that Safety Insurance Group, Inc. has a market capitalization of US$1.2b, and total annual CEO compensation was reported as US$3.7m for the year to December 2024. We note that's an increase of 87% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$800k.

On examining similar-sized companies in the American Insurance industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$3.6m. So it looks like Safety Insurance Group compensates George Murphy in line with the median for the industry. Moreover, George Murphy also holds US$8.8m worth of Safety Insurance Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	US$800k	US$800k	22%
Other	US$2.9m	US$1.2m	78%
Total Compensation	US$3.7m	US$2.0m	100%

Talking in terms of the industry, salary represented approximately 14% of total compensation out of all the companies we analyzed, while other remuneration made up 86% of the pie. It's interesting to note that Safety Insurance Group pays out a greater portion of remuneration through salary, compared to the industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Safety Insurance Group, Inc.'s Growth

Over the last three years, Safety Insurance Group, Inc. has shrunk its earnings per share by 19% per year. In the last year, its revenue is up 20%.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Safety Insurance Group, Inc. Been A Good Investment?

Safety Insurance Group, Inc. has generated a total shareholder return of 3.6% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

In Summary...

Although the company has performed relatively well, we still think there are some areas that could be improved. Despite robust revenue growth, until EPS growth improves, shareholders may be hesitant to increase CEO pay by too much.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Safety Insurance Group that investors should look into moving forward.

Important note: Safety Insurance Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.