It's Probably Less Likely That SelectQuote, Inc.'s (NYSE:SLQT) CEO Will See A Huge Pay Rise This Year

Key Insights

• SelectQuote to hold its Annual General Meeting on 14th of November
• Total pay for CEO Tim Danker includes US$525.0k salary
• The overall pay is comparable to the industry average
• SelectQuote's three-year loss to shareholders was 94% while its EPS was down 63% over the past three years

Shareholders of SelectQuote, Inc. (NYSE:SLQT) will have been dismayed by the negative share price return over the last three years. Per share earnings growth is also poor, despite revenues growing. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 14th of November, where they can impact on future company performance by voting on resolutions, including executive compensation. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

View our latest analysis for SelectQuote

Comparing SelectQuote, Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that SelectQuote, Inc. has a market capitalization of US$213m, and reported total annual CEO compensation of US$2.6m for the year to June 2023. Notably, that's a decrease of 16% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$525k.

For comparison, other companies in the American Insurance industry with market capitalizations ranging between US$100m and US$400m had a median total CEO compensation of US$2.3m. This suggests that SelectQuote remunerates its CEO largely in line with the industry average. Furthermore, Tim Danker directly owns US$2.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$525k	US$525k	20%
Other	US$2.1m	US$2.6m	80%
Total Compensation	US$2.6m	US$3.2m	100%

Talking in terms of the industry, salary represented approximately 15% of total compensation out of all the companies we analyzed, while other remuneration made up 85% of the pie. SelectQuote pays out 20% of remuneration in the form of a salary, significantly higher than the industry average. 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 SelectQuote, Inc.'s Growth Numbers

SelectQuote, Inc. has reduced its earnings per share by 63% a year over the last three years. In the last year, its revenue is up 39%.

The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has SelectQuote, Inc. Been A Good Investment?

Few SelectQuote, Inc. shareholders would feel satisfied with the return of -94% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. 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.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for SelectQuote that investors should think about before committing capital to this stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.