Despite Lincoln National Corporation's (NYSE:LNC) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. The upcoming AGM on 03 June 2021 may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.
Comparing Lincoln National Corporation's CEO Compensation With the industry
Our data indicates that Lincoln National Corporation has a market capitalization of US$13b, and total annual CEO compensation was reported as US$14m for the year to December 2020. We note that's a small decrease of 7.2% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.4m.
For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$11m. From this we gather that Dennis Glass is paid around the median for CEOs in the industry. Moreover, Dennis Glass also holds US$52m worth of Lincoln National 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 18% of total compensation represents salary and 82% is other remuneration. It's interesting to note that Lincoln National 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 Lincoln National Corporation's Growth Numbers
Over the last three years, Lincoln National Corporation has shrunk its earnings per share by 27% per year. The trailing twelve months of revenue was pretty much the same as the prior period.
Overall this is not a very positive result for shareholders. And the flat revenue is seriously uninspiring. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Lincoln National Corporation Been A Good Investment?
With a total shareholder return of 13% over three years, Lincoln National Corporation shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.
Shareholders may want to check for free if Lincoln National insiders are buying or selling shares.
Important note: Lincoln National 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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