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What We Learned About Planet Fitness' (NYSE:PLNT) CEO Pay

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Simply Wall St
·3 min read
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This article will reflect on the compensation paid to Chris Rondeau who has served as CEO of Planet Fitness, Inc. (NYSE:PLNT) since 2013. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Planet Fitness.

Check out our latest analysis for Planet Fitness

How Does Total Compensation For Chris Rondeau Compare With Other Companies In The Industry?

At the time of writing, our data shows that Planet Fitness, Inc. has a market capitalization of US$5.0b, and reported total annual CEO compensation of US$4.4m for the year to December 2019. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$755k.

In comparison with other companies in the industry with market capitalizations ranging from US$4.0b to US$12b, the reported median CEO total compensation was US$8.7m. In other words, Planet Fitness pays its CEO lower than the industry median.

Component

2019

2018

Proportion (2019)

Salary

US$755k

US$700k

17%

Other

US$3.7m

US$3.7m

83%

Total Compensation

US$4.4m

US$4.4m

100%

Speaking on an industry level, nearly 25% of total compensation represents salary, while the remainder of 75% is other remuneration. In Planet Fitness' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

A Look at Planet Fitness, Inc.'s Growth Numbers

Planet Fitness, Inc. has reduced its earnings per share by 9.4% a year over the last three years. Its revenue is down 19% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Planet Fitness, Inc. Been A Good Investment?

Boasting a total shareholder return of 111% over three years, Planet Fitness, 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.

In Summary...

As we noted earlier, Planet Fitness pays its CEO lower than the norm for similar-sized companies belonging to the same industry. And while EPS growth is negative, shareholder returns have been healthy recently. We would like to see EPS growth, but in our view CEO compensation is modest.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 2 warning signs for Planet Fitness you should be aware of, and 1 of them can't be ignored.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.