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Is Lincoln Electric Holdings, Inc.'s (NASDAQ:LECO) CEO Being Overpaid?

Simply Wall St

Chris Mapes became the CEO of Lincoln Electric Holdings, Inc. (NASDAQ:LECO) in 2012. First, this article will compare CEO compensation with compensation at similar sized 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.

See our latest analysis for Lincoln Electric Holdings

How Does Chris Mapes's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Lincoln Electric Holdings, Inc. has a market cap of US$5.9b, and reported total annual CEO compensation of US$6.8m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$965k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$6.7m.

So Chris Mapes 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, below, how CEO compensation at Lincoln Electric Holdings has changed over time.

NasdaqGS:LECO CEO Compensation, December 13th 2019

Is Lincoln Electric Holdings, Inc. Growing?

Over the last three years Lincoln Electric Holdings, Inc. has grown its earnings per share (EPS) by an average of 18% per year (using a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.

This shows that the company has improved itself over the last few years. Good news for shareholders. While it would be good to see revenue growth, profits matter more in the end. You might want to check this free visual report on analyst forecasts for future earnings.

Has Lincoln Electric Holdings, Inc. Been A Good Investment?

Lincoln Electric Holdings, Inc. has served shareholders reasonably well, with a total return of 28% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Chris Mapes is paid around the same as most CEOs of similar size companies.

The company is growing EPS but shareholder returns have been sound but not amazing. So upon reflection one could argue that the CEO pay is quite reasonable. Shareholders may want to check for free if Lincoln Electric Holdings insiders are buying or selling shares.

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

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.

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. Thank you for reading.