Here's Why Crawford & Company's (NYSE:CRD.B) CEO Compensation Is The Least Of Shareholders' Concerns

Key Insights

• Crawford will host its Annual General Meeting on 10th of May
• Salary of US$716.3k is part of CEO Rohit Verma's total remuneration
• The overall pay is comparable to the industry average
• Over the past three years, Crawford's EPS fell by 19% and over the past three years, the total shareholder return was 8.8%

Despite Crawford & Company's (NYSE:CRD.B) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. The upcoming AGM on 10th of May may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

Check out our latest analysis for Crawford

Comparing Crawford & Company's CEO Compensation With The Industry

Our data indicates that Crawford & Company has a market capitalization of US$482m, and total annual CEO compensation was reported as US$2.4m for the year to December 2023. We note that's an increase of 21% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$716k.

For comparison, other companies in the American Insurance industry with market capitalizations ranging between US$200m and US$800m had a median total CEO compensation of US$2.6m. So it looks like Crawford compensates Rohit Verma in line with the median for the industry. Moreover, Rohit Verma also holds US$2.6m worth of Crawford stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$716k	US$716k	30%
Other	US$1.6m	US$1.2m	70%
Total Compensation	US$2.4m	US$1.9m	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. Crawford is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Crawford & Company's Growth Numbers

Over the last three years, Crawford & Company has shrunk its earnings per share by 19% per year. Its revenue is up 2.1% 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. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Crawford & Company Been A Good Investment?

With a total shareholder return of 8.8% over three years, Crawford & Company has done okay by shareholders, but there's always room for improvement. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Crawford that investors should be aware of in a dynamic business environment.

Switching gears from Crawford, 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. 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.