This article will reflect on the compensation paid to Bernard Acoca who has served as CEO of El Pollo Loco Holdings, Inc. (NASDAQ:LOCO) since 2018. This analysis will also assess whether El Pollo Loco Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing El Pollo Loco Holdings, Inc.'s CEO Compensation With the industry
At the time of writing, our data shows that El Pollo Loco Holdings, Inc. has a market capitalization of US$507m, and reported total annual CEO compensation of US$1.9m for the year to December 2019. We note that's a decrease of 34% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$597k.
For comparison, other companies in the same industry with market capitalizations ranging between US$200m and US$800m had a median total CEO compensation of US$2.2m. So it looks like El Pollo Loco Holdings compensates Bernard Acoca in line with the median for the industry. Furthermore, Bernard Acoca directly owns US$2.5m worth of shares in the company, implying that they are deeply invested in the company's success.
Speaking on an industry level, nearly 25% of total compensation represents salary, while the remainder of 75% is other remuneration. It's interesting to note that El Pollo Loco Holdings pays out a greater portion of remuneration through salary, compared to the industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at El Pollo Loco Holdings, Inc.'s Growth Numbers
El Pollo Loco Holdings, Inc. has seen its earnings per share (EPS) increase by 40% a year over the past three years. It saw its revenue drop 4.0% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has El Pollo Loco Holdings, Inc. Been A Good Investment?
We think that the total shareholder return of 44%, over three years, would leave most El Pollo Loco Holdings, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As previously discussed, Bernard is compensated close to the median for companies of its size, and which belong to the same industry. Few would be critical of the leadership, since returns have been juicy and EPS are moving in the right direction. Indeed, many might consider that Bernard is compensated rather modestly, given the solid company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 3 warning signs for El Pollo Loco Holdings that investors should look into moving forward.
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.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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