Yahoo Finance Shareholders May Be A Bit More Conservative With LendingClub Corporation's (NYSE:LC) CEO Compensation For Now
Key Insights
LendingClub's Annual General Meeting to take place on 11th of June
Salary of US$500.0k is part of CEO Scott Sanborn's total remuneration
The overall pay is comparable to the industry average
LendingClub's three-year loss to shareholders was 52% while its EPS grew by 48% over the past three years
The underwhelming share price performance of LendingClub Corporation (NYSE:LC) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 11th of June. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.
Check out our latest analysis for LendingClub
How Does Total Compensation For Scott Sanborn Compare With Other Companies In The Industry?
Our data indicates that LendingClub Corporation has a market capitalization of US$955m, and total annual CEO compensation was reported as US$4.6m for the year to December 2023. That's slightly lower by 7.3% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$500k.
On comparing similar companies from the American Consumer Finance industry with market caps ranging from US$400m to US$1.6b, we found that the median CEO total compensation was US$4.8m. From this we gather that Scott Sanborn is paid around the median for CEOs in the industry. Furthermore, Scott Sanborn directly owns US$11m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$500k | US$500k | 11% |
Other | US$4.1m | US$4.4m | 89% |
Total Compensation | US$4.6m | US$4.9m | 100% |
Talking in terms of the industry, salary represented approximately 17% of total compensation out of all the companies we analyzed, while other remuneration made up 83% of the pie. It's interesting to note that LendingClub allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
LendingClub Corporation's Growth
Over the past three years, LendingClub Corporation has seen its earnings per share (EPS) grow by 48% per year. It saw its revenue drop 13% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 LendingClub Corporation Been A Good Investment?
With a total shareholder return of -52% over three years, LendingClub Corporation shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for LendingClub that investors should think about before committing capital to this stock.
Switching gears from LendingClub, 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.
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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.
