Shareholders Will Probably Hold Off On Increasing Grand Canyon Education, Inc.'s (NASDAQ:LOPE) CEO Compensation For The Time Being

The underwhelming share price performance of Grand Canyon Education, Inc. (NASDAQ:LOPE) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 16 June 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Grand Canyon Education

How Does Total Compensation For Brian Mueller Compare With Other Companies In The Industry?

According to our data, Grand Canyon Education, Inc. has a market capitalization of US$4.2b, and paid its CEO total annual compensation worth US$2.1m over the year to December 2020. Notably, that's an increase of 9.1% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$321k.

For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$1.9m. From this we gather that Brian Mueller is paid around the median for CEOs in the industry. Furthermore, Brian Mueller directly owns US$27m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	US$321k	US$321k	15%
Other	US$1.8m	US$1.6m	85%
Total Compensation	US$2.1m	US$1.9m	100%

On an industry level, roughly 16% of total compensation represents salary and 84% is other remuneration. Our data reveals that Grand Canyon Education allocates salary more or less in line with the wider market. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Grand Canyon Education, Inc.'s Growth

Grand Canyon Education, Inc.'s earnings per share (EPS) grew 6.7% per year over the last three years. In the last year, its revenue is up 7.0%.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Grand Canyon Education, Inc. Been A Good Investment?

Since shareholders would have lost about 20% over three years, some Grand Canyon Education, Inc. investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

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 1 warning sign for Grand Canyon Education that investors should look into moving forward.

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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