Sheldon Adelson became the CEO of Las Vegas Sands Corp. (NYSE:LVS) in 2004, 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.
Comparing Las Vegas Sands Corp.'s CEO Compensation With the industry
According to our data, Las Vegas Sands Corp. has a market capitalization of US$45b, and paid its CEO total annual compensation worth US$25m over the year to December 2019. That's mostly flat as compared to the prior year's compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at US$5.0m.
On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$11m. Hence, we can conclude that Sheldon Adelson is remunerated higher than the industry median. Moreover, Sheldon Adelson also holds US$23b worth of Las Vegas Sands stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Talking in terms of the industry, salary represented approximately 25% of total compensation out of all the companies we analyzed, while other remuneration made up 75% of the pie. Las Vegas Sands pays a modest slice of remuneration through salary, as compared 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.
Las Vegas Sands Corp.'s Growth
Over the last three years, Las Vegas Sands Corp. has shrunk its earnings per share by 41% per year. Its revenue is down 56% over the previous year.
The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Las Vegas Sands Corp. Been A Good Investment?
Since shareholders would have lost about 3.8% over three years, some Las Vegas Sands Corp. investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
As we touched on above, Las Vegas Sands Corp. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Disappointingly, share price gains over the last three years have failed to materialize. Arguably worse, we've been waiting for positive EPS growth for the last three years. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Las Vegas Sands that you should be aware of before investing.
Switching gears from Las Vegas Sands, 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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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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