How Much Did LKQ Corporation's (NASDAQ:LKQ) CEO Pocket Last Year?
Nick Zarcone has been the CEO of LKQ Corporation (NASDAQ:LKQ) since 2017. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big 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. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for LKQ
How Does Nick Zarcone's Compensation Compare With Similar Sized Companies?
Our data indicates that LKQ Corporation is worth US$11b, and total annual CEO compensation was reported as US$4.0m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$955k. 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 group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
A first glance this seems like a real positive for shareholders, since Nick Zarcone is paid less than the average total compensation paid by other large companies. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at LKQ has changed over time.
Is LKQ Corporation Growing?
Over the last three years LKQ Corporation has shrunk its earnings per share by an average of 2.6% per year (measured with a line of best fit). In the last year, its revenue is up 10%.
Unfortunately there is a complete lack of earnings per share improvement, over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has LKQ Corporation Been A Good Investment?
LKQ Corporation has generated a total shareholder return of 12% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
It appears that LKQ Corporation remunerates its CEO below most large companies.
Nick Zarcone is remunerated more modestly than is a normal at most large companies. However, the earnings per share are not moving in the right direction, and the returns to shareholders could have been better. There is room for improved company performance, but we don't see the CEO pay as a big issue here. Whatever your view on compensation, you might want to check if insiders are buying or selling LKQ shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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