Is IAC/InterActiveCorp’s (NASDAQ:IAC) CEO Pay Justified?

Joey Levin became the CEO of IAC/InterActiveCorp (NASDAQ:IAC) in 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for IAC/InterActiveCorp

How Does Joey Levin’s Compensation Compare With Similar Sized Companies?

According to our data, IAC/InterActiveCorp has a market capitalization of US$22b, and paid its CEO total annual compensation worth US$6.3m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$1.0m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren’t that many of them.

This would give shareholders a good impression of the company, since most large companies pay more, leaving less for shareholders. While this is a good thing, you’ll need to understand the business better before you can form an opinion.

You can see, below, how CEO compensation at IAC/InterActiveCorp has changed over time.

NasdaqGS:IAC CEO Compensation, January 13th 2020
NasdaqGS:IAC CEO Compensation, January 13th 2020

Is IAC/InterActiveCorp Growing?

On average over the last three years, IAC/InterActiveCorp has grown earnings per share (EPS) by 66% each year (using a line of best fit). In the last year, its revenue is up 13%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. It could be important to check this free visual depiction of what analysts expect for the future.

Has IAC/InterActiveCorp Been A Good Investment?

Most shareholders would probably be pleased with IAC/InterActiveCorp for providing a total return of 274% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary…

It looks like IAC/InterActiveCorp pays its CEO less than the average at large companies.

Considering the underlying business is growing earnings, this would suggest the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Joey Levin deserves a raise! It’s not often we see shareholders do so well, and yet the CEO is paid modestly. The cherry on top would be if company insiders are buying shares with their own money. Whatever your view on compensation, you might want to check if insiders are buying or selling IAC/InterActiveCorp shares (free trial).

If you want to buy a stock that is better than IAC/InterActiveCorp, this free list of high return, low debt companies is a great place to look.

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.

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