Marillyn Hewson became the CEO of Lockheed Martin Corporation (NYSE:LMT) in 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Marillyn Hewson’s Compensation Compare With Similar Sized Companies?
According to our data, Lockheed Martin Corporation has a market capitalization of US$106b, and paid its CEO total annual compensation worth US$22m over the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.8m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
It would therefore appear that Lockheed Martin Corporation pays Marillyn Hewson more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Lockheed Martin has changed over time.
Is Lockheed Martin Corporation Growing?
On average over the last three years, Lockheed Martin Corporation has grown earnings per share (EPS) by 27% each year (using a line of best fit). It achieved revenue growth of 11% over the last year.
This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Lockheed Martin Corporation Been A Good Investment?
Boasting a total shareholder return of 52% over three years, Lockheed Martin Corporation has done well by shareholders. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
We examined the amount Lockheed Martin Corporation pays its CEO, and compared it to the amount paid by other large companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. On top of that, in the same period, returns to shareholders have been great. So, considering this good performance, the CEO compensation may be quite appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Lockheed Martin (free visualization of insider trades).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
If you spot an error that warrants correction, please contact the editor at email@example.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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