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Is Live Nation Entertainment, Inc.'s (NYSE:LYV) CEO Overpaid Relative To Its Peers?

Simply Wall St

Michael Rapino became the CEO of Live Nation Entertainment, Inc. (NYSE:LYV) in 2005. First, this article will compare CEO compensation with compensation at other large companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Live Nation Entertainment

How Does Michael Rapino's Compensation Compare With Similar Sized Companies?

According to our data, Live Nation Entertainment, Inc. has a market capitalization of US$15b, and paid its CEO total annual compensation worth US$12m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$3.0m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations over US$8.0b and the 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 Michael Rapino 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 a visual representation of the CEO compensation at Live Nation Entertainment, below.

NYSE:LYV CEO Compensation, February 11th 2020

Is Live Nation Entertainment, Inc. Growing?

Over the last three years Live Nation Entertainment, Inc. has grown its earnings per share (EPS) by an average of 11% per year (using a line of best fit). In the last year, its revenue is up 7.2%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.

Has Live Nation Entertainment, Inc. Been A Good Investment?

I think that the total shareholder return of 151%, over three years, would leave most Live Nation Entertainment, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Michael Rapino is paid around what is normal the leaders of larger companies.

The company is growing earnings per share and total shareholder returns have been pleasing. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. So you may want to check if insiders are buying Live Nation Entertainment shares with their own money (free access).

If you want to buy a stock that is better than Live Nation Entertainment, 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.