Yahoo Finance Is Brown & Brown Inc’s (NYSE:BRO) CEO Being Overpaid?
In 2009 J. Brown was appointed CEO of Brown & Brown Inc (NYSE:BRO). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for Brown & Brown
How Does J. Brown’s Compensation Compare With Similar Sized Companies?
According to our data, Brown & Brown Inc has a market capitalization of US$8.2b, and pays its CEO total annual compensation worth US$4.6m. (This number is for the twelve months until 2017). While we always look at total compensation first, we note that the salary component is less, at US$1.0m. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO compensation was US$6.6m.
That means J. Brown receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Brown & Brown has changed from year to year.
Is Brown & Brown Inc Growing?
On average over the last three years, Brown & Brown Inc has grown earnings per share (EPS) by 26% each year. It achieved revenue growth of 8.7% over the last year.
This demonstrates that the company has been improving recently. A good result. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably.
You might want to check this free visual report on analyst forecasts for future earnings.
Has Brown & Brown Inc Been A Good Investment?
Most shareholders would probably be pleased with Brown & Brown Inc for providing a total return of 84% over three years. This strong performance might mean some shareholders don’t mind if the CEO is paid more than is normal for a company of its size.
In Summary…
J. Brown is paid around what is normal the leaders of comparable size companies.
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. So one could argue the CEO compensation is quite modest, if you consider company performance! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Brown & Brown (free visualization of insider trades).
Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
