Stock Analysis

A Quick Analysis On Lincoln Educational Services' (NASDAQ:LINC) CEO Compensation

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Scott Shaw became the CEO of Lincoln Educational Services Corporation (NASDAQ:LINC) in 2015, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Lincoln Educational Services

Comparing Lincoln Educational Services Corporation's CEO Compensation With the industry

According to our data, Lincoln Educational Services Corporation has a market capitalization of US$170m, and paid its CEO total annual compensation worth US$977k over the year to December 2019. Notably, that's an increase of 29% over the year before. In particular, the salary of US$500.0k, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$961k. This suggests that Lincoln Educational Services remunerates its CEO largely in line with the industry average. What's more, Scott Shaw holds US$5.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20192018Proportion (2019)
Salary US$500k US$500k 51%
Other US$477k US$255k 49%
Total CompensationUS$977k US$755k100%

Speaking on an industry level, nearly 18% of total compensation represents salary, while the remainder of 82% is other remuneration. Lincoln Educational Services is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

NasdaqGS:LINC CEO Compensation November 30th 2020

Lincoln Educational Services Corporation's Growth

Over the past three years, Lincoln Educational Services Corporation has seen its earnings per share (EPS) grow by 122% per year. It achieved revenue growth of 5.8% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. 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 Lincoln Educational Services Corporation Been A Good Investment?

We think that the total shareholder return of 182%, over three years, would leave most Lincoln Educational Services Corporation shareholders smiling. 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.

To Conclude...

As we touched on above, Lincoln Educational Services Corporation 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. Investors would surely be happy to see that returns have been great, and that EPS is up. Although the pay is close to the industry median, overall performance is excellent, so we don't think the CEO is paid too generously. Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 4 warning signs for Lincoln Educational Services that investors should look into moving forward.

Switching gears from Lincoln Educational Services, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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