This article will reflect on the compensation paid to Jonathan Ilany who has served as CEO of Tiptree Inc. (NASDAQ:TIPT) since 2015. This analysis will also assess whether Tiptree pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Tiptree
Comparing Tiptree Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that Tiptree Inc. has a market capitalization of US$168m, and reported total annual CEO compensation of US$3.0m for the year to December 2019. That's a notable increase of 40% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$600k.
In comparison with other companies in the industry with market capitalizations ranging from US$100m to US$400m, the reported median CEO total compensation was US$1.4m. Accordingly, our analysis reveals that Tiptree Inc. pays Jonathan Ilany north of the industry median. Moreover, Jonathan Ilany also holds US$5.2m worth of Tiptree stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | US$600k | US$600k | 20% |
| Other | US$2.4m | US$1.6m | 80% |
| Total Compensation | US$3.0m | US$2.2m | 100% |
On an industry level, roughly 16% of total compensation represents salary and 84% is other remuneration. According to our research, Tiptree has allocated a higher percentage of pay to salary in comparison to the wider 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 Tiptree Inc.'s Growth Numbers
Over the last three years, Tiptree Inc. has shrunk its earnings per share by 88% per year. Its revenue is up 7.3% over the last year.
The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Tiptree Inc. Been A Good Investment?
Since shareholders would have lost about 6.7% over three years, some Tiptree Inc. investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
As we touched on above, Tiptree Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look good against shareholder returns, which have been negative for the past three years. What's equally worrying is that the company isn't growing by our analysis. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 2 warning signs for Tiptree (1 doesn't sit too well with us!) that you should be aware of before investing here.
Important note: Tiptree 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.
If you’re looking to trade Tiptree, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted
Valuation is complex, but we're here to simplify it.
Discover if Tiptree might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
Access Free AnalysisThis 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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
About NasdaqCM:TIPT
Tiptree
Through its subsidiaries, provides specialty insurance products and related services primarily in the United States.
Solid track record with excellent balance sheet and pays a dividend.
