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How Should Investors React To Lincoln Electric Holdings, Inc.'s (NASDAQ:LECO) CEO Pay?

Simply Wall St

In 2012 Chris Mapes was appointed CEO of Lincoln Electric Holdings, Inc. (NASDAQ:LECO). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

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View our latest analysis for Lincoln Electric Holdings

How Does Chris Mapes's Compensation Compare With Similar Sized Companies?

Our data indicates that Lincoln Electric Holdings, Inc. is worth US$5.1b, and total annual CEO compensation is US$6.8m. (This number is for the twelve months until December 2018). That's less than last year. We think total compensation is more important but we note that the CEO salary is lower, at US$965k. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$6.9m.

So Chris Mapes receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at Lincoln Electric Holdings has changed from year to year.

NasdaqGS:LECO CEO Compensation, May 17th 2019

Is Lincoln Electric Holdings, Inc. Growing?

Lincoln Electric Holdings, Inc. has increased its earnings per share (EPS) by an average of 28% a year, over the last three years (using a line of best fit). It achieved revenue growth of 8.2% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.

Has Lincoln Electric Holdings, Inc. Been A Good Investment?

Boasting a total shareholder return of 48% over three years, Lincoln Electric 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...

Chris Mapes 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. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. Shareholders may want to check for free if Lincoln Electric Holdings insiders are buying or selling shares.

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.

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.