Stock Analysis

Shareholders May Not Be So Generous With Lennox International Inc.'s (NYSE:LII) CEO Compensation And Here's Why

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CEO Todd Bluedorn has done a decent job of delivering relatively good performance at Lennox International Inc. (NYSE:LII) recently. As shareholders go into the upcoming AGM on 20 May 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Lennox International

How Does Total Compensation For Todd Bluedorn Compare With Other Companies In The Industry?

At the time of writing, our data shows that Lennox International Inc. has a market capitalization of US$13b, and reported total annual CEO compensation of US$14m for the year to December 2020. That's a notable increase of 9.5% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.2m.

In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$9.2m. Hence, we can conclude that Todd Bluedorn is remunerated higher than the industry median. What's more, Todd Bluedorn holds US$29m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20202019Proportion (2020)
Salary US$1.2m US$1.2m 9%
Other US$13m US$12m 91%
Total CompensationUS$14m US$13m100%

Talking in terms of the industry, salary represented approximately 16% of total compensation out of all the companies we analyzed, while other remuneration made up 84% of the pie. It's interesting to note that Lennox International allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

NYSE:LII CEO Compensation May 14th 2021

A Look at Lennox International Inc.'s Growth Numbers

Lennox International Inc. has seen its earnings per share (EPS) increase by 16% a year over the past three years. In the last year, its revenue is up 2.7%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Lennox International Inc. Been A Good Investment?

Most shareholders would probably be pleased with Lennox International Inc. for providing a total return of 78% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for Lennox International that investors should be aware of in a dynamic business environment.

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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