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Does Grand Canyon Education, Inc.’s (NASDAQ:LOPE) CEO Pay Reflect Performance?

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Brian Mueller became the CEO of Grand Canyon Education, Inc. (NASDAQ:LOPE) in 2008. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Grand Canyon Education

How Does Brian Mueller’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Grand Canyon Education, Inc. has a market cap of US$5.6b, and is paying total annual CEO compensation of US$2.8m. (This figure is for the year to December 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$642k. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO compensation of that group was US$6.2m.

A first glance this seems like a real positive for shareholders, since Brian Mueller is paid less than the average compensation paid by similar sized companies. While this is a good thing, you’ll need to understand the business better before you can form an opinion.

You can see a visual representation of the CEO compensation at Grand Canyon Education, below.

NasdaqGS:LOPE CEO Compensation, February 25th 2019
NasdaqGS:LOPE CEO Compensation, February 25th 2019

Is Grand Canyon Education, Inc. Growing?

On average over the last three years, Grand Canyon Education, Inc. has grown earnings per share (EPS) by 20% each year (using a line of best fit). It saw its revenue drop -13% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. Shareholders might be interested in this free visualization of analyst forecasts.

Has Grand Canyon Education, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Grand Canyon Education, Inc. for providing a total return of 201% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

It looks like Grand Canyon Education, Inc. pays its CEO less than similar sized companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Brian Mueller deserves a raise!

It is relatively rare to see a modestly paid CEO when performance is so impressive. But it is even better if company insiders are also buying shares with their own money. Whatever your view on compensation, you might want to check if insiders are buying or selling Grand Canyon Education shares (free trial).

Important note: Grand Canyon Education may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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. Thank you for reading.

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