Shareholders May Be More Conservative With The Travelers Companies, Inc.'s (NYSE:TRV) CEO Compensation For Now

Key Insights

• Travelers Companies will host its Annual General Meeting on 15th of May
• Salary of US$1.45m is part of CEO Alan Schnitzer's total remuneration
• Total compensation is 61% above industry average
• Over the past three years, Travelers Companies' EPS grew by 7.0% and over the past three years, the total shareholder return was 51%

Performance at The Travelers Companies, Inc. (NYSE:TRV) has been reasonably good and CEO Alan Schnitzer has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 15th of May. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Travelers Companies

How Does Total Compensation For Alan Schnitzer Compare With Other Companies In The Industry?

At the time of writing, our data shows that The Travelers Companies, Inc. has a market capitalization of US$50b, and reported total annual CEO compensation of US$23m for the year to December 2023. That's a modest increase of 7.9% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.5m.

In comparison with other companies in the American Insurance industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$14m. Accordingly, our analysis reveals that The Travelers Companies, Inc. pays Alan Schnitzer north of the industry median. Furthermore, Alan Schnitzer directly owns US$61m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$1.5m	US$1.3m	6%
Other	US$21m	US$20m	94%
Total Compensation	US$23m	US$21m	100%

On an industry level, roughly 14% of total compensation represents salary and 86% is other remuneration. Travelers Companies sets aside a smaller share of compensation for 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 The Travelers Companies, Inc.'s Growth Numbers

Over the past three years, The Travelers Companies, Inc. has seen its earnings per share (EPS) grow by 7.0% per year. In the last year, its revenue is up 14%.

We would argue that the modest growth in revenue is a notable positive. And, while modest, the EPS growth is noticeable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. 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 The Travelers Companies, Inc. Been A Good Investment?

Boasting a total shareholder return of 51% over three years, The Travelers Companies, Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Travelers Companies that investors should be aware of in a dynamic business environment.

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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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.