Roger Krone became the CEO of Leidos Holdings, Inc. (NYSE:LDOS) in 2014. This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. 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.
How Does Roger Krone's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Leidos Holdings, Inc. has a market cap of US$11b, and reported total annual CEO compensation of US$9.8m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$1.1m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
So Roger Krone is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at Leidos Holdings has changed over time.
Is Leidos Holdings, Inc. Growing?
On average over the last three years, Leidos Holdings, Inc. has grown earnings per share (EPS) by 10% each year (using a line of best fit). Its revenue is up 5.4% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. It could be important to check this free visual depiction of what analysts expect for the future.
Has Leidos Holdings, Inc. Been A Good Investment?
I think that the total shareholder return of 102%, over three years, would leave most Leidos Holdings, Inc. shareholders smiling. 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.
Roger Krone is paid around the same as most CEOs of large 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! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Leidos Holdings.
Important note: Leidos Holdings 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.
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