Key Insights

Insurance Australia Group's Annual General Meeting to take place on 10th of October CEO Nick Hawkins' total compensation includes salary of AU$1.77m The total compensation is 49% less than the average for the industry Insurance Australia Group's EPS grew by 22% over the past three years  while total shareholder return over the past three years was 31%

Shareholders will be pleased by the robust performance of Insurance Australia Group Limited (ASX:IAG) recently and this will be kept in mind in the upcoming AGM on 10th of October. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. Here is our take on why we think CEO compensation is fair and may even warrant a raise.

See our latest analysis for Insurance Australia Group

How Does Total Compensation For Nick Hawkins Compare With Other Companies In The Industry?

Our data indicates that Insurance Australia Group Limited has a market capitalization of AU$14b, and total annual CEO compensation was reported as AU$2.9m for the year to June 2023. This means that the compensation hasn't changed much from last year. Notably, the salary which is AU$1.77m, represents most of the total compensation being paid.

On examining similar-sized companies in the Australian Insurance industry with market capitalizations between AU$6.3b and AU$19b, we discovered that the median CEO total compensation of that group was AU$5.7m. That is to say, Nick Hawkins is paid under the industry median. Furthermore, Nick Hawkins directly owns AU$2.8m worth of shares in the company.

Component 2023 2022 Proportion (2023) Salary AU$1.8m AU$1.7m 60% Other AU$1.2m AU$1.2m 40% Total Compensation AU$2.9m AU$2.9m 100%

Talking in terms of the industry, salary represented approximately 52% of total compensation out of all the companies we analyzed, while other remuneration made up 48% of the pie. Insurance Australia Group is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

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A Look at Insurance Australia Group Limited's Growth Numbers

Insurance Australia Group Limited has seen its earnings per share (EPS) increase by 22% a year over the past three years. In the last year, its revenue is up 16%.

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. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Insurance Australia Group Limited Been A Good Investment?

With a total shareholder return of 31% over three years, Insurance Australia Group Limited shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

Overall, the company hasn't done too poorly performance-wise, but we would like to see some improvement. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Insurance Australia Group (free visualization of insider trades).

Arguably, business quality is much more important than CEO compensation levels. So check out this freelist 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.