Dan Arnold has been the CEO of LPL Financial Holdings Inc. (NASDAQ:LPLA) since 2017. First, this article will compare CEO compensation with compensation at similar sized 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does Dan Arnold's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that LPL Financial Holdings Inc. has a market cap of US$5.9b, and is paying total annual CEO compensation of US$7.1m. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$800k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$6.9m.
So Dan Arnold is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see a visual representation of the CEO compensation at LPL Financial Holdings, below.
Is LPL Financial Holdings Inc. Growing?
LPL Financial Holdings Inc. has increased its earnings per share (EPS) by an average of 44% a year, over the last three years (using a line of best fit). It achieved revenue growth of 15% over the last year.
This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has LPL Financial Holdings Inc. Been A Good Investment?
Boasting a total shareholder return of 159% over three years, LPL Financial Holdings Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
Dan Arnold is paid around what is normal the leaders of comparable size companies.
The company is growing earnings per share and total shareholder returns have been pleasing. Indeed, many might consider the pay rather modest, given the solid company performance! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling LPL Financial Holdings (free visualization of insider trades).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.