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Howard Lutnick became the CEO of BGC Partners, Inc. (NASDAQ:BGCP) in 1999. 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Howard Lutnick's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that BGC Partners, Inc. has a market cap of US$2.2b, and is paying total annual CEO compensation of US$16m. (This figure is for the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at US$1.0m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.6m.
Thus we can conclude that Howard Lutnick receives more in total compensation than the median of a group of companies in the same market, and of similar size to BGC Partners, Inc.. However, this doesn't necessarily mean the pay 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 BGC Partners, below.
Is BGC Partners, Inc. Growing?
On average over the last three years, BGC Partners, Inc. has shrunk earnings per share by 34% each year (measured with a line of best fit). It achieved revenue growth of 13% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has BGC Partners, Inc. Been A Good Investment?
BGC Partners, Inc. has served shareholders reasonably well, with a total return of 18% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
We compared total CEO remuneration at BGC Partners, Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
And while shareholder returns have been respectable, they have hardly been superb. So we doubt many shareholders would consider the CEO pay to be particularly modest! So you may want to check if insiders are buying BGC Partners shares with their own money (free access).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.