Should You Be Pleased About The CEO Pay At Leidos Holdings, Inc.'s (NYSE:LDOS)
In 2014 Roger Krone was appointed CEO of Leidos Holdings, Inc. (NYSE:LDOS). This analysis aims first to contrast CEO compensation with other large companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Leidos Holdings
How Does Roger Krone's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Leidos Holdings, Inc. has a market cap of US$13b, and reported total annual CEO compensation of US$11m for the year to January 2020. That's a notable increase of 8.5% on last year. While we always look at total compensation first, we note that the salary component is less, at US$1.2m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$12m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Leidos Holdings stands. Talking in terms of the sector, salary represented approximately 16% of total compensation out of all the companies we analysed, while other remuneration made up 84% of the pie. Non-salary compensation represents a greater slice of the remuneration pie for Leidos Holdings, in sharp contrast to the overall sector.
That means Roger Krone receives fairly typical remuneration for the CEO of a large company. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance. You can see, below, how CEO compensation at Leidos Holdings has changed over time.
Is Leidos Holdings, Inc. Growing?
Leidos Holdings, Inc. has seen earnings per share (EPS) move positively by an average of 31% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 8.7%.
This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. You might want to check this free visual report on analyst forecasts for future earnings.
Has Leidos Holdings, Inc. Been A Good Investment?
Boasting a total shareholder return of 97% over three years, Leidos Holdings, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
Remuneration for Roger Krone is close enough to the median pay for a CEO of a large company .
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. So one could argue the CEO compensation is quite modest, if you consider company performance! On another note, we've spotted 2 warning signs for Leidos Holdings that investors should look into moving forward.
If you want to buy a stock that is better than Leidos Holdings, this free list of high return, low debt companies is a great place to look.
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.
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