U.S. Markets closed

Is Lennox International Inc’s (NYSE:LII) CEO Overpaid Relative To Its Peers?

Todd Bluedorn became the CEO of Lennox International Inc (NYSE:LII) in 2007. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. 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.

View our latest analysis for Lennox International

How Does Todd Bluedorn’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Lennox International Inc has a market cap of US$8.5b, and is paying total annual CEO compensation of US$11m. (This is based on the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$1.1m. We looked at a group of companies with market capitalizations from US$4.0b to US$12b, and the median CEO compensation was US$6.9m.

It would therefore appear that Lennox International Inc pays Todd Bluedorn 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. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see a visual representation of the CEO compensation at Lennox International, below.

NYSE:LII CEO Compensation November 27th 18

Is Lennox International Inc Growing?

Over the last three years Lennox International Inc has grown its earnings per share (EPS) by an average of 20% per year. In the last year, its revenue is up 2.3%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see modest revenue growth, suggesting the underlying business is healthy.

You might want to check this free visual report on analyst forecasts for future earnings.

Has Lennox International Inc Been A Good Investment?

I think that the total shareholder return of 61%, over three years, would leave most Lennox International Inc shareholders smiling. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.

In Summary…

We examined the amount Lennox International Inc pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

However, the earnings per share growth over three years is certainly impressive. On top of that, in the same period, returns to shareholders have been great. So, considering this good performance, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying Lennox International shares with their own money (free access).

Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.