Scott Sanborn became the CEO of LendingClub Corporation (NYSE:LC) in 2016. 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. This process should give us an idea about how appropriately the CEO is paid.
How Does Scott Sanborn's Compensation Compare With Similar Sized Companies?
According to our data, LendingClub Corporation has a market capitalization of US$1.0b, and paid its CEO total annual compensation worth US$6.0m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$500k. 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 selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$2.5m.
It would therefore appear that LendingClub Corporation pays Scott Sanborn more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at LendingClub, below.
Is LendingClub Corporation Growing?
Over the last three years LendingClub Corporation has grown its earnings per share (EPS) by an average of 16% per year (using a line of best fit). Its revenue is down 1.5% over last year.
This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end. It could be important to check this free visual depiction of what analysts expect for the future.
Has LendingClub Corporation Been A Good Investment?
Given the total loss of 58% over three years, many shareholders in LendingClub Corporation are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared total CEO remuneration at LendingClub Corporation with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. However, the returns to investors are far less impressive, over the same period. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. So you may want to check if insiders are buying LendingClub shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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