Jeff Sprecher became the CEO of Intercontinental Exchange, Inc. (NYSE:ICE) in 2000, 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 Intercontinental Exchange, Inc.'s CEO Compensation With the industry
Our data indicates that Intercontinental Exchange, Inc. has a market capitalization of US$57b, and total annual CEO compensation was reported as US$14m for the year to December 2019. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.1m.
In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$13m. From this we gather that Jeff Sprecher is paid around the median for CEOs in the industry. Moreover, Jeff Sprecher also holds US$476m worth of Intercontinental Exchange stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. It's interesting to note that Intercontinental Exchange allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Intercontinental Exchange, Inc.'s Growth Numbers
Intercontinental Exchange, Inc.'s earnings per share (EPS) grew 13% per year over the last three years. It achieved revenue growth of 10% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Intercontinental Exchange, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Intercontinental Exchange, Inc. for providing a total return of 59% 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.
As previously discussed, Jeff is compensated close to the median for companies of its size, and which belong to the same industry. Few would be critical of the leadership, since returns have been juicy and EPS are moving in the right direction. Indeed, many might consider that Jeff is compensated rather modestly, given the solid company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Intercontinental Exchange that investors should think about before committing capital to this stock.
Important note: Intercontinental Exchange is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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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