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Is Royal Caribbean Cruises Ltd (NYSE:RCL) Overpaying Its CEO?

Richard Fain has been the CEO of Royal Caribbean Cruises Ltd (NYSE:RCL) since 1988. 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Royal Caribbean Cruises

How Does Richard Fain’s Compensation Compare With Similar Sized Companies?

According to our data, Royal Caribbean Cruises Ltd has a market capitalization of US$22.4b, and pays its CEO total annual compensation worth US$13m. That’s a notable increase of 28% on last year. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO compensation was US$11m.

So Richard Fain is paid around the average of the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.

The graphic below shows how CEO compensation at Royal Caribbean Cruises has changed from year to year.

NYSE:RCL CEO Compensation November 12th 18

Is Royal Caribbean Cruises Ltd Growing?

Over the last three years Royal Caribbean Cruises Ltd has grown its earnings per share (EPS) by an average of 35% per year. Its revenue is up 5.6% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s also good to see modest revenue growth, suggesting the underlying business is healthy.

It could be important to check this free visual depiction of what analysts expect for the future.

Has Royal Caribbean Cruises Ltd Been A Good Investment?

Royal Caribbean Cruises Ltd has served shareholders reasonably well, with a total return of 16% over three years. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.

In Summary…

Richard Fain is paid around the same as most CEOs of large companies.

The company is growing EPS but shareholder returns have been sound but not amazing. So upon reflection one could argue that the CEO pay is quite reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Royal Caribbean Cruises Ltd (free visualization of insider trades).

Or you might rather take a peek at this analytical visualization of historic cash flow, earnings and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.