Yahoo Finance We Think The Compensation For Lincoln Educational Services Corporation's (NASDAQ:LINC) CEO Looks About Right
Key Insights
Lincoln Educational Services to hold its Annual General Meeting on 2nd of May
Total pay for CEO Scott Shaw includes US$500.0k salary
Total compensation is similar to the industry average
Lincoln Educational Services' total shareholder return over the past three years was 51% while its EPS was down 18% over the past three years
The share price of Lincoln Educational Services Corporation (NASDAQ:LINC) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 2nd of May. 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 what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.
See our latest analysis for Lincoln Educational Services
Comparing Lincoln Educational Services Corporation's CEO Compensation With The Industry
At the time of writing, our data shows that Lincoln Educational Services Corporation has a market capitalization of US$314m, and reported total annual CEO compensation of US$2.5m for the year to December 2023. We note that's an increase of 41% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$500k.
In comparison with other companies in the American Consumer Services industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$2.6m. So it looks like Lincoln Educational Services compensates Scott Shaw in line with the median for the industry. What's more, Scott Shaw holds US$11m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$500k | US$500k | 20% |
Other | US$2.0m | US$1.2m | 80% |
Total Compensation | US$2.5m | US$1.7m | 100% |
Speaking on an industry level, nearly 20% of total compensation represents salary, while the remainder of 80% is other remuneration. Lincoln Educational Services is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Lincoln Educational Services Corporation's Growth Numbers
Over the last three years, Lincoln Educational Services Corporation has shrunk its earnings per share by 18% per year. In the last year, its revenue is up 8.6%.
Overall this is not a very positive result for shareholders. The fairly low revenue growth fails to impress given that the EPS is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Lincoln Educational Services Corporation Been A Good Investment?
We think that the total shareholder return of 51%, over three years, would leave most Lincoln Educational Services Corporation shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. 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 is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 2 warning signs for Lincoln Educational Services (1 shouldn't be ignored!) that you should be aware of before investing here.
Switching gears from Lincoln Educational Services, 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.
