Here's What We Learned About The CEO Pay At Loews Corporation (NYSE:L)

James Tisch became the CEO of Loews Corporation (NYSE:L) in 1998, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Loews.

See our latest analysis for Loews

Comparing Loews Corporation's CEO Compensation With the industry

At the time of writing, our data shows that Loews Corporation has a market capitalization of US$12b, and reported total annual CEO compensation of US$9.3m for the year to December 2019. We note that's an increase of 63% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$975k.

In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$14m. In other words, Loews pays its CEO lower than the industry median. Moreover, James Tisch also holds US$700m worth of Loews 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 16% of total compensation represents salary and 84% is other remuneration. Loews pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Loews Corporation's Growth

Loews Corporation has reduced its earnings per share by 76% a year over the last three years. In the last year, its revenue is down 11%.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Loews Corporation Been A Good Investment?

Given the total shareholder loss of 9.3% over three years, many shareholders in Loews Corporation are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we noted earlier, Loews pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Over the last three years, shareholder returns have been downright disappointing, and EPSgrowth has been equally disappointing. Although we wouldn’t say CEO compensation is high, it’s tough to foresee shareholders warming up to thoughts of a bump anytime soon.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 2 which are a bit concerning) in Loews we think you should know about.

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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