Ron Clarke became the CEO of FLEETCOR Technologies, Inc. (NYSE:FLT) in 2000, and we think it’s a good time to look at the executive’s compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for FLEETCOR Technologies.
Check out our latest analysis for FLEETCOR Technologies
Comparing FLEETCOR Technologies, Inc.’s CEO Compensation With the industry
At the time of writing, our data shows that FLEETCOR Technologies, Inc. has a market capitalization of US$22b, and reported total annual CEO compensation of US$12m for the year to December 2019. Notably, that’s an increase of 48% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.0m.
On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$11m. This suggests that FLEETCOR Technologies remunerates its CEO largely in line with the industry average. Moreover, Ron Clarke also holds US$356m worth of FLEETCOR Technologies stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | US$1.0m | US$1.0m | 9% |
| Other | US$11m | US$6.8m | 91% |
| Total Compensation | US$12m | US$7.8m | 100% |
On an industry level, around 14% of total compensation represents salary and 86% is other remuneration. FLEETCOR Technologies pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
FLEETCOR Technologies, Inc.’s Growth
Over the past three years, FLEETCOR Technologies, Inc. has seen its earnings per share (EPS) grow by 26% per year. In the last year, its revenue is up 8.8%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 FLEETCOR Technologies, Inc. Been A Good Investment?
We think that the total shareholder return of 89%, over three years, would leave most FLEETCOR Technologies, 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…
As we noted earlier, FLEETCOR Technologies pays its CEO in line with similar-sized companies belonging to the same industry. Investors would surely be happy to see that returns have been great, and that earnings per share are up. So one could argue that CEO compensation is quite modest, if you consider company performance! Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.
CEO compensation can have a massive impact on performance, but it’s just one element. That’s why we did some digging and identified 2 warning signs for FLEETCOR Technologies that investors should think about before committing capital to this stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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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