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Most Shareholders Will Probably Agree With Globe Life Inc.'s (NYSE:GL) CEO Compensation

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·4-min read
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Despite Globe Life Inc.'s (NYSE:GL) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. Some of these issues will occupy shareholders' minds as the AGM rolls around on 29 April 2021. 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. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

See our latest analysis for Globe Life

How Does Total Compensation For Gary Coleman Compare With Other Companies In The Industry?

According to our data, Globe Life Inc. has a market capitalization of US$12b, and paid its CEO total annual compensation worth US$9.2m over the year to December 2020. That's a notable increase of 9.8% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.0m.

For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$11m. So it looks like Globe Life compensates Gary Coleman in line with the median for the industry. Moreover, Gary Coleman also holds US$73m worth of Globe Life stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2020

2019

Proportion (2020)

Salary

US$1.0m

US$942k

11%

Other

US$8.2m

US$7.4m

89%

Total Compensation

US$9.2m

US$8.3m

100%

Talking in terms of the industry, salary represented approximately 16% of total compensation out of all the companies we analyzed, while other remuneration made up 84% of the pie. Globe Life pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

Globe Life Inc.'s Growth

Over the last three years, Globe Life Inc. has shrunk its earnings per share by 18% per year. In the last year, its revenue is up 4.6%.

Few shareholders would be pleased to read that EPS have declined. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Globe Life Inc. Been A Good Investment?

With a total shareholder return of 25% over three years, Globe Life Inc. 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...

Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about whether these returns will continue. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Globe Life that investors should think about before committing capital to this stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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