Shareholders May Not Be So Generous With HCI Group, Inc.'s (NYSE:HCI) CEO Compensation And Here's Why

By
Simply Wall St
Published
May 27, 2021
NYSE:HCI
Source: Shutterstock

Performance at HCI Group, Inc. (NYSE:HCI) has been reasonably good and CEO Paresh Patel has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 03 June 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

View our latest analysis for HCI Group

Comparing HCI Group, Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that HCI Group, Inc. has a market capitalization of US$668m, and reported total annual CEO compensation of US$5.2m for the year to December 2020. We note that's a decrease of 14% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$987k.

For comparison, other companies in the same industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$2.6m. This suggests that Paresh Patel is paid more than the median for the industry. What's more, Paresh Patel holds US$66m 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$987k US$950k 19%
Other US$4.2m US$5.1m 81%
Total CompensationUS$5.2m US$6.1m100%

Talking in terms of the industry, salary represented approximately 18% of total compensation out of all the companies we analyzed, while other remuneration made up 82% of the pie. There isn't a significant difference between HCI Group and the broader market, in terms of salary allocation in the overall compensation package. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
NYSE:HCI CEO Compensation May 27th 2021

A Look at HCI Group, Inc.'s Growth Numbers

Over the past three years, HCI Group, Inc. has seen its earnings per share (EPS) grow by 46% per year. Its revenue is up 32% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has HCI Group, Inc. Been A Good Investment?

We think that the total shareholder return of 109%, over three years, would leave most HCI Group, Inc. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 4 warning signs for HCI Group you should be aware of, and 1 of them is a bit unpleasant.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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