The CEO Of Trupanion, Inc. (NASDAQ:TRUP) Might See A Pay Rise On The Horizon

By
Simply Wall St
Published
June 09, 2021
NasdaqGM:TRUP
Source: Shutterstock

The decent performance at Trupanion, Inc. (NASDAQ:TRUP) recently will please most shareholders as they go into the AGM coming up on 16 June 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is fair and may even warrant a raise.

Check out our latest analysis for Trupanion

How Does Total Compensation For Darryl Graham Rawlings Compare With Other Companies In The Industry?

According to our data, Trupanion, Inc. has a market capitalization of US$3.8b, and paid its CEO total annual compensation worth US$1.2m over the year to December 2020. Notably, that's an increase of 10.0% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$300k.

On comparing similar companies from the same industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$7.2m. That is to say, Darryl Graham Rawlings is paid under the industry median. What's more, Darryl Graham Rawlings holds US$147m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20202019Proportion (2020)
Salary US$300k US$300k 26%
Other US$861k US$755k 74%
Total CompensationUS$1.2m US$1.1m100%

On an industry level, roughly 18% of total compensation represents salary and 82% is other remuneration. According to our research, Trupanion has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
NasdaqGM:TRUP CEO Compensation June 10th 2021

A Look at Trupanion, Inc.'s Growth Numbers

Over the last three years, Trupanion, Inc. has shrunk its earnings per share by 65% per year. In the last year, its revenue is up 34%.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. 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. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Trupanion, Inc. Been A Good Investment?

Boasting a total shareholder return of 147% over three years, Trupanion, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

The company's overall performance, while not bad, could be better. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for Trupanion that investors should be aware of in a dynamic business environment.

Switching gears from Trupanion, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.