Yahoo Finance Here's Why Shareholders May Consider Paying Safety Insurance Group, Inc.'s (NASDAQ:SAFT) CEO A Little More
Key Insights
Safety Insurance Group to hold its Annual General Meeting on 15th of May
Salary of US$800.0k is part of CEO George Murphy's total remuneration
Total compensation is 65% below industry average
Over the past three years, Safety Insurance Group's EPS fell by 48% and over the past three years, the total shareholder return was 11%
Shareholders will be pleased by the robust performance of Safety Insurance Group, Inc. (NASDAQ:SAFT) recently and this will be kept in mind in the upcoming AGM on 15th of May. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. Here is our take on why we think CEO compensation is fair and may even warrant a raise.
Check out our latest analysis for Safety Insurance Group
Comparing Safety Insurance Group, Inc.'s CEO Compensation With The Industry
According to our data, Safety Insurance Group, Inc. has a market capitalization of US$1.2b, and paid its CEO total annual compensation worth US$2.0m over the year to December 2023. We note that's a decrease of 29% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$800k.
For comparison, other companies in the American Insurance industry with market capitalizations ranging between US$1.0b and US$3.2b had a median total CEO compensation of US$5.6m. Accordingly, Safety Insurance Group pays its CEO under the industry median. What's more, George Murphy holds US$8.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$800k | US$800k | 41% |
Other | US$1.2m | US$2.0m | 59% |
Total Compensation | US$2.0m | US$2.8m | 100% |
On an industry level, roughly 14% of total compensation represents salary and 86% is other remuneration. According to our research, Safety Insurance Group has allocated a higher percentage of pay to salary in comparison to the wider industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Safety Insurance Group, Inc.'s Growth Numbers
Safety Insurance Group, Inc. has reduced its earnings per share by 48% a year over the last three years. In the last year, its revenue is up 17%.
The decrease in EPS could be a concern for some investors. 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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Safety Insurance Group, Inc. Been A Good Investment?
With a total shareholder return of 11% over three years, Safety Insurance Group, Inc. shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
To Conclude...
The company's overall performance, while not bad, could be better. If it manages to keep up the current streak, CEO remuneration could well be one of shareholders' least concerns. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Safety Insurance Group (of which 2 are significant!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from Safety Insurance Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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.
