In 2015 Alan Schnitzer was appointed CEO of The Travelers Companies, Inc. (NYSE:TRV). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Alan Schnitzer’s Compensation Compare With Similar Sized Companies?
Our data indicates that The Travelers Companies, Inc. is worth US$36b, and total annual CEO compensation is US$15m. (This is based on the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$1.0m. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
As you can see, Alan Schnitzer is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean The Travelers Companies, Inc. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Travelers Companies has changed over time.
Is The Travelers Companies, Inc. Growing?
Over the last three years The Travelers Companies, Inc. has shrunk its earnings per share by an average of 11% per year (measured with a line of best fit). Its revenue is up 4.8% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has The Travelers Companies, Inc. Been A Good Investment?
The Travelers Companies, Inc. has served shareholders reasonably well, with a total return of 25% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
We compared the total CEO remuneration paid by The Travelers Companies, Inc., and compared it to remuneration at a group of other large companies. We found that it pays well over the median amount paid in the benchmark group.We think many shareholders would be underwhelmed with the business growth over the last three years.
And while shareholder returns have been respectable, they have hardly been superb. So we doubt many shareholders would consider the CEO pay to be particularly modest! Shareholders may want to check for free if Travelers Companies insiders are buying or selling shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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.