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Arnold Donald became the CEO of Carnival plc (LON:CCL) in 2013. First, this article will compare CEO compensation with compensation at other large companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Arnold Donald’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Carnival plc has a market cap of UK£30b, and is paying total annual CEO compensation of US$13m. (This number is for the twelve months until 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.5m. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO compensation to be US$4.9m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts – even though some are quite a bit bigger than others).
As you can see, Arnold Donald is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean Carnival plc is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Carnival has changed over time.
Is Carnival plc Growing?
Over the last three years Carnival plc has grown its earnings per share (EPS) by an average of 18% per year (using a line of best fit). It achieved revenue growth of 7.8% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. 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 Carnival plc Been A Good Investment?
Most shareholders would probably be pleased with Carnival plc for providing a total return of 47% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared total CEO remuneration at Carnival plc with the amount paid at other large companies. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Whatever your view on compensation, you might want to check if insiders are buying or selling Carnival shares (free trial).
If you want to buy a stock that is better than Carnival, this free list of high return, low debt companies is a great place to look.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.