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Should You Worry About LendingTree, Inc.'s (NASDAQ:TREE) CEO Pay?

Simply Wall St

In 2008 Doug Lebda was appointed CEO of LendingTree, Inc. (NASDAQ:TREE). First, this article will compare CEO compensation with compensation at similar sized 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. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for LendingTree

How Does Doug Lebda's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that LendingTree, Inc. has a market cap of US$4.1b, and is paying total annual CEO compensation of US$42m. (This figure is for the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$750k. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO total compensation was US$5.1m.

Thus we can conclude that Doug Lebda receives more in total compensation than the median of a group of companies in the same market, and of similar size to LendingTree, 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 LendingTree, below.

NasdaqGS:TREE CEO Compensation, September 11th 2019

Is LendingTree, Inc. Growing?

On average over the last three years, LendingTree, Inc. has grown earnings per share (EPS) by 24% each year (using a line of best fit). In the last year, its revenue is up 35%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. You might want to check this free visual report on analyst forecasts for future earnings.

Has LendingTree, Inc. Been A Good Investment?

I think that the total shareholder return of 224%, over three years, would leave most LendingTree, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We compared total CEO remuneration at LendingTree, 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.

However, the earnings per share growth over three years is certainly impressive. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Shareholders may want to check for free if LendingTree insiders are buying or selling shares.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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 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. Thank you for reading.