Yahoo Finance Is Reinsurance Group of America, Incorporated (NYSE:RGA) Overpaying Its CEO?
Anna Manning became the CEO of Reinsurance Group of America, Incorporated (NYSE:RGA) in 2017. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Reinsurance Group of America
How Does Anna Manning's Compensation Compare With Similar Sized Companies?
According to our data, Reinsurance Group of America, Incorporated has a market capitalization of US$6.1b, and paid its CEO total annual compensation worth US$8.1m over the year to December 2019. Notably, that's an increase of 21% over the year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$7.6m.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Reinsurance Group of America. Talking in terms of the sector, salary represented approximately 21% of total compensation out of all the companies we analysed, while other remuneration made up 79% of the pie. Reinsurance Group of America sets aside a smaller share of compensation for salary, in comparison to the overall industry.
So Anna Manning is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context. You can see, below, how CEO compensation at Reinsurance Group of America has changed over time.
Is Reinsurance Group of America, Incorporated Growing?
Over the last three years Reinsurance Group of America, Incorporated has shrunk its earnings per share by an average of 1.8% per year (measured with a line of best fit). Its revenue is up 11% over last year.
The lack of earnings per share growth in the last three years is unimpressive. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Reinsurance Group of America, Incorporated Been A Good Investment?
With a three year total loss of 21%, Reinsurance Group of America, Incorporated would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Anna Manning is paid around the same as most CEOs of similar size companies.
The company isn't growing EPS, and shareholder returns have been disappointing. This doesn't look great when you consider CEO remuneration is up on last year. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. Moving away from CEO compensation for the moment, we've identified 1 warning sign for Reinsurance Group of America that you should be aware of before investing.
Important note: Reinsurance Group of America may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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