Is Las Vegas Sands Corp.’s (NYSE:LVS) CEO Pay Justified?

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Sheldon Adelson has been the CEO of Las Vegas Sands Corp. (NYSE:LVS) since 2004. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Las Vegas Sands

How Does Sheldon Adelson’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Las Vegas Sands Corp. has a market cap of US$51b, and is paying total annual CEO compensation of US$24m. (This figure is for the year to December 2018). That’s below the compensation, last year. While we always look at total compensation first, we note that the salary component is less, at US$5.0m. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren’t that many of them.

Thus we can conclude that Sheldon Adelson receives more in total compensation than the median of a group of large companies in the same market as Las Vegas Sands Corp.. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

The graphic below shows how CEO compensation at Las Vegas Sands has changed from year to year.

NYSE:LVS CEO Compensation, May 13th 2019
NYSE:LVS CEO Compensation, May 13th 2019

Is Las Vegas Sands Corp. Growing?

Over the last three years Las Vegas Sands Corp. has grown its earnings per share (EPS) by an average of 21% per year (using a line of best fit). Its revenue is up 4.2% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.

Has Las Vegas Sands Corp. Been A Good Investment?

Most shareholders would probably be pleased with Las Vegas Sands Corp. for providing a total return of 69% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary…

We compared the total CEO remuneration paid by Las Vegas Sands Corp., and compared it to remuneration at a group of other large companies. As discussed above, we discovered that the company pays more than the median of that group.

However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Las Vegas Sands.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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. Thank you for reading.