Does Stride's (NYSE:LRN) CEO Salary Compare Well With The Performance Of The Company?

Nate Davis became the CEO of Stride, Inc. (NYSE:LRN) in 2018, 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 assess whether Stride pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Stride

How Does Total Compensation For Nate Davis Compare With Other Companies In The Industry?

According to our data, Stride, Inc. has a market capitalization of US$945m, and paid its CEO total annual compensation worth US$16m over the year to June 2020. We note that's an increase of 63% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$927k.

On comparing similar companies from the same industry with market caps ranging from US$400m to US$1.6b, we found that the median CEO total compensation was US$3.9m. Accordingly, our analysis reveals that Stride, Inc. pays Nate Davis north of the industry median. Furthermore, Nate Davis directly owns US$19m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 19% of total compensation represents salary, while the remainder of 81% is other remuneration. It's interesting to note that Stride allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Stride, Inc.'s Growth

Stride, Inc.'s earnings per share (EPS) grew 94% per year over the last three years. Its revenue is up 13% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Stride, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Stride, Inc. for providing a total return of 43% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

As we touched on above, Stride, Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. Considering such exceptional results for the company, we'd venture to say CEO compensation is fair. Given the strong history of shareholder returns, the shareholders are probably very happy with Nate's performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for Stride (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.

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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