Stock Analysis

Here's Why We Think W. R. Berkley Corporation's (NYSE:WRB) CEO Compensation Looks Fair for the time being

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Under the guidance of CEO Rob Berkley, W. R. Berkley Corporation (NYSE:WRB) has performed reasonably well recently. As shareholders go into the upcoming AGM on 15 June 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Here is our take on why we think the CEO compensation looks appropriate.

Check out our latest analysis for W. R. Berkley

How Does Total Compensation For Rob Berkley Compare With Other Companies In The Industry?

At the time of writing, our data shows that W. R. Berkley Corporation has a market capitalization of US$13b, and reported total annual CEO compensation of US$10.0m for the year to December 2020. That's a notable decrease of 9.4% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.0m.

For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$11m. From this we gather that Rob Berkley is paid around the median for CEOs in the industry. What's more, Rob Berkley holds US$91m 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$1.0m US$1.0m 10%
Other US$9.0m US$10m 90%
Total CompensationUS$10.0m US$11m100%

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. W. R. Berkley 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.

NYSE:WRB CEO Compensation June 9th 2021

W. R. Berkley Corporation's Growth

Over the past three years, W. R. Berkley Corporation has seen its earnings per share (EPS) grow by 9.5% per year. It achieved revenue growth of 8.6% over the last year.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has W. R. Berkley Corporation Been A Good Investment?

Boasting a total shareholder return of 57% over three years, W. R. Berkley Corporation has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

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. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

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 1 warning sign for W. R. Berkley that you should be aware of before investing.

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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