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How Should Investors React To YUM! Brands, Inc.'s (NYSE:YUM) CEO Pay?

Simply Wall St

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Greg Creed has been the CEO of YUM! Brands, Inc. (NYSE:YUM) since 2015. This analysis aims first to contrast CEO compensation with 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. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for YUM! Brands

How Does Greg Creed's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that YUM! Brands, Inc. has a market cap of US$31b, and is paying total annual CEO compensation of US$14m. (This is based on the year to December 2018). We note that's an increase of 13% above last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.2m. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.

So Greg Creed 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.

You can see a visual representation of the CEO compensation at YUM! Brands, below.

NYSE:YUM CEO Compensation, May 9th 2019

Is YUM! Brands, Inc. Growing?

On average over the last three years, YUM! Brands, Inc. has grown earnings per share (EPS) by 35% each year (using a line of best fit). It saw its revenue drop -4.5% over the last year.

This demonstrates that the company has been improving recently. A good result. Revenue growth is a real positive for growth, but ultimately profits are more important. It could be important to check this free visual depiction of what analysts expect for the future.

Has YUM! Brands, Inc. Been A Good Investment?

Boasting a total shareholder return of 80% over three years, YUM! Brands, 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...

Greg Creed is paid around what is normal the leaders of larger companies.

The company is growing earnings per share and total shareholder returns have been pleasing. So one could argue the CEO compensation is quite modest, if you consider company performance! Whatever your view on compensation, you might want to check if insiders are buying or selling YUM! Brands shares (free trial).

If you want to buy a stock that is better than YUM! Brands, this free list of high return, low debt companies is a great place to look.

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.