Key Insights

• Selective Insurance Group will host its Annual General Meeting on 30th of April
• Total pay for CEO John Marchioni includes US$1.04m salary
• Total compensation is similar to the industry average
• Over the past three years, Selective Insurance Group's EPS fell by 21% and over the past three years, the total shareholder return was 11%

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Despite positive share price growth of 11% for Selective Insurance Group, Inc. (NASDAQ:SIGI) over the last few years, earnings growth has been disappointing, which suggests something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 30th of April. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

How Does Total Compensation For John Marchioni Compare With Other Companies In The Industry?

Our data indicates that Selective Insurance Group, Inc. has a market capitalization of US$5.5b, and total annual CEO compensation was reported as US$6.3m for the year to December 2024. That's just a smallish increase of 5.5% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.0m.

For comparison, other companies in the American Insurance industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$7.8m. This suggests that Selective Insurance Group remunerates its CEO largely in line with the industry average. Furthermore, John Marchioni directly owns US$14m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	US$1.0m	US$1.0m	17%
Other	US$5.3m	US$5.0m	83%
Total Compensation	US$6.3m	US$6.0m	100%

On an industry level, roughly 14% of total compensation represents salary and 86% is other remuneration. Selective Insurance Group is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Selective Insurance Group, Inc.'s Growth Numbers

Over the last three years, Selective Insurance Group, Inc. has shrunk its earnings per share by 21% per year. It achieved revenue growth of 15% over the last year.

Few shareholders would be pleased to read that EPS have declined. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Selective Insurance Group, Inc. Been A Good Investment?

With a total shareholder return of 11% over three years, Selective 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...

Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about whether these returns will continue. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well.

Switching gears from Selective 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.

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.