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Eilif Serck-Hanssen became the CEO of Laureate Education, Inc. (NASDAQ:LAUR) in 2018, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Laureate Education.
How Does Total Compensation For Eilif Serck-Hanssen Compare With Other Companies In The Industry?
Our data indicates that Laureate Education, Inc. has a market capitalization of US$2.6b, and total annual CEO compensation was reported as US$5.0m for the year to December 2019. That's mostly flat as compared to the prior year's compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at US$850k.
In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$1.9m. Hence, we can conclude that Eilif Serck-Hanssen is remunerated higher than the industry median. Moreover, Eilif Serck-Hanssen also holds US$2.5m worth of Laureate Education stock directly under their own name.
On an industry level, around 19% of total compensation represents salary and 81% is other remuneration. It's interesting to note that Laureate Education allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Laureate Education, Inc.'s Growth Numbers
Over the past three years, Laureate Education, Inc. has seen its earnings per share (EPS) grow by 86% per year. In the last year, its revenue is down 8.8%.
Overall this is a positive result for shareholders, showing that the company has improved in recent 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 Laureate Education, Inc. Been A Good Investment?
With a three year total loss of 18% for the shareholders, Laureate Education, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
As we noted earlier, Laureate Education pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, the EPS growth is certainly impressive, but shareholder returns — over the same period — have been disappointing. Although we'd stop short of calling it inappropriate, we think Eilif is earning a very handsome sum.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Laureate Education that investors should think about before committing capital to this stock.
Switching gears from Laureate Education, 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.
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.
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