Sean Reilly has been the CEO of Lamar Advertising Company (REIT) (NASDAQ:LAMR) since 2011, and this article will examine the executive’s compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing Lamar Advertising Company (REIT)’s CEO Compensation With the industry
At the time of writing, our data shows that Lamar Advertising Company (REIT) has a market capitalization of US$6.7b, and reported total annual CEO compensation of US$5.0m for the year to December 2019. Notably, that’s a decrease of 11% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$700k.
On comparing similar companies from the same industry with market caps ranging from US$4.0b to US$12b, we found that the median CEO total compensation was US$5.8m. From this we gather that Sean Reilly is paid around the median for CEOs in the industry. Furthermore, Sean Reilly directly owns US$105m worth of shares in the company, implying that they are deeply invested in the company’s success.
Talking in terms of the industry, salary represented approximately 15% of total compensation out of all the companies we analyzed, while other remuneration made up 85% of the pie. There isn’t a significant difference between Lamar Advertising Company (REIT) and the broader market, in terms of salary allocation in the overall compensation package. If non-salary compensation dominates total pay, it’s an indicator that the executive’s salary is tied to company performance.
Lamar Advertising Company (REIT)’s Growth
Over the past three years, Lamar Advertising Company (REIT) has seen its earnings per share (EPS) grow by 6.6% per year. Its revenue is up 7.6% over the last year.
We would argue that the improvement in revenue is good, but isn’t particularly impressive, but we’re happy with the modest EPS growth. Considering these factors we’d say performance has been pretty decent, though not amazing. 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 Lamar Advertising Company (REIT) Been A Good Investment?
With a total shareholder return of 6.0% over three years, Lamar Advertising Company (REIT) has done okay by shareholders. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
As we touched on above, Lamar Advertising Company (REIT) is currently paying a compensation that’s close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, earnings per share and shareholder returns have been stable over the last three years, but have not grown substantially. So, although the CEO compensation seems reasonable, shareholders might want to see some further progress before they agree that Sean should get a raise.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Lamar Advertising Company (REIT) you should be aware of, and 1 of them makes us a bit uncomfortable.
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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