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Vince McMahon has been the CEO of World Wrestling Entertainment, Inc. (NYSE:WWE) since 2009, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether World Wrestling Entertainment pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing World Wrestling Entertainment, Inc.'s CEO Compensation With the industry
Our data indicates that World Wrestling Entertainment, Inc. has a market capitalization of US$3.0b, and total annual CEO compensation was reported as US$3.5m for the year to December 2019. That's a notable decrease of 38% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.4m.
In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$2.0m. Hence, we can conclude that Vince McMahon is remunerated higher than the industry median. Furthermore, Vince McMahon directly owns US$1.1b worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, roughly 17% of total compensation represents salary and 83% is other remuneration. World Wrestling Entertainment pays out 40% of remuneration in the form of a salary, significantly higher than the industry average. 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 World Wrestling Entertainment, Inc.'s Growth Numbers
Over the past three years, World Wrestling Entertainment, Inc. has seen its earnings per share (EPS) grow by 73% per year. In the last year, its revenue is up 16%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has World Wrestling Entertainment, Inc. Been A Good Investment?
Boasting a total shareholder return of 45% over three years, World Wrestling Entertainment, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As we touched on above, World Wrestling Entertainment, Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. The pleasing shareholder returns are the cherry on top. We wouldn't be wrong in saying that shareholders feel that Vince's performance creates value for the company.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for World Wrestling Entertainment that you should be aware of before investing.
Switching gears from World Wrestling Entertainment, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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