Yahoo Finance Why We Think Shareholders May Be Considering Bumping Up Erie Indemnity Company's (NASDAQ:ERIE) CEO Compensation
Key Insights
Erie Indemnity will host its Annual General Meeting on 23rd of April
Salary of US$1.10m is part of CEO Tim NeCastro's total remuneration
Total compensation is 49% below industry average
Erie Indemnity's total shareholder return over the past three years was 81% while its EPS grew by 15% over the past three years
The impressive results at Erie Indemnity Company (NASDAQ:ERIE) recently will be great news for shareholders. At the upcoming AGM on 23rd of April, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.
View our latest analysis for Erie Indemnity
Comparing Erie Indemnity Company's CEO Compensation With The Industry
According to our data, Erie Indemnity Company has a market capitalization of US$20b, and paid its CEO total annual compensation worth US$7.8m over the year to December 2023. We note that's an increase of 73% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.
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$15m. Accordingly, Erie Indemnity pays its CEO under the industry median. Furthermore, Tim NeCastro directly owns US$5.8m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.1m | US$1.0m | 14% |
Other | US$6.7m | US$3.5m | 86% |
Total Compensation | US$7.8m | US$4.5m | 100% |
On an industry level, around 14% of total compensation represents salary and 86% is other remuneration. There isn't a significant difference between Erie Indemnity and the broader market, in terms of salary allocation in the overall compensation package. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Erie Indemnity Company's Growth
Erie Indemnity Company's earnings per share (EPS) grew 15% per year over the last three years. Its revenue is up 15% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Erie Indemnity Company Been A Good Investment?
Boasting a total shareholder return of 81% over three years, Erie Indemnity Company 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.
To Conclude...
The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. 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.
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 Erie Indemnity 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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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.
