Paul Sarvadi became the CEO of Insperity, Inc. (NYSE:NSP) in 1989. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Insperity

How Does Paul Sarvadi's Compensation Compare With Similar Sized Companies?

Our data indicates that Insperity, Inc. is worth US$1.3b, and total annual CEO compensation was reported as US$7.2m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$1.0m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$4.7m.

Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Insperity. Speaking on an industry level, we can see that nearly 20% of total compensation represents salary, while the remainder of 80% is other remuneration. Our data reveals that Insperity allocates salary in line with the wider market.

Thus we can conclude that Paul Sarvadi receives more in total compensation than the median of a group of companies in the same market, and of similar size to Insperity, Inc.. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. You can see a visual representation of the CEO compensation at Insperity, below.

Is Insperity, Inc. Growing?

Over the last three years Insperity, Inc. has seen earnings per share (EPS) move in a positive direction by an average of 34% per year (using a line of best fit). It achieved revenue growth of 13% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. You might want to check this free visual report on analyst forecasts for future earnings.

Has Insperity, Inc. Been A Good Investment?

Given the total loss of 18% over three years, many shareholders in Insperity, Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We examined the amount Insperity, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. While EPS is moving in the right direction, we'd say shareholders would want better returns before the CEO is paid much more. CEO compensation is an important area to keep your eyes on, but we've also identified 3 warning signs for Insperity (1 is significant!) that you should be aware of before investing here.

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.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.