In 2007 Randy Ramlo was appointed CEO of United Fire Group, Inc. (NASDAQ:UFCS). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
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How Does Randy Ramlo’s Compensation Compare With Similar Sized Companies?
According to our data, United Fire Group, Inc. has a market capitalization of US$1.2b, and pays its CEO total annual compensation worth US$3.1m. (This figure is for the year to December 2018). Notably, that’s an increase of 19% over the year before. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$800k. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$2.7m.
So Randy Ramlo receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at United Fire Group has changed from year to year.
Is United Fire Group, Inc. Growing?
Over the last three years United Fire Group, Inc. has shrunk its earnings per share by an average of 32% per year (measured with a line of best fit). Its revenue is up 6.9% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has United Fire Group, Inc. Been A Good Investment?
United Fire Group, Inc. has generated a total shareholder return of 28% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
Randy Ramlo is paid around what is normal the leaders of comparable size companies.
We’re not seeing great strides in earnings per share, and total returns were decent but not amazing in the last three years. Shareholders might not love the fact the CEO remuneration is up on last year. We’re not saying the CEO pay is too generous, but one might argue that the company should improve returns to shareholders before increasing it. Whatever your view on compensation, you might want to check if insiders are buying or selling United Fire Group shares (free trial).
Important note: United Fire Group may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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 firstname.lastname@example.org. 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.