Shareholders May Be More Conservative With Lincoln National Corporation's (NYSE:LNC) CEO Compensation For Now

Key Insights

• Lincoln National's Annual General Meeting to take place on 22nd of May
• CEO Ellen R. Cooper's total compensation includes salary of US$1.20m
• The overall pay is 105% above the industry average
• Lincoln National's EPS declined by 25% over the past three years while total shareholder loss over the past three years was 23%

We've discovered 3 warning signs about Lincoln National. View them for free.

Shareholders of Lincoln National Corporation (NYSE:LNC) will have been dismayed by the negative share price return over the last three years. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. Shareholders will have a chance to take their concerns to the board at the next AGM on 22nd of May and vote on resolutions including executive compensation, which studies show may have an impact on company performance. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

See our latest analysis for Lincoln National

Comparing Lincoln National Corporation's CEO Compensation With The Industry

Our data indicates that Lincoln National Corporation has a market capitalization of US$5.9b, and total annual CEO compensation was reported as US$16m for the year to December 2024. We note that's an increase of 18% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.2m.

On examining similar-sized companies in the American Insurance industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$7.8m. Accordingly, our analysis reveals that Lincoln National Corporation pays Ellen R. Cooper north of the industry median. What's more, Ellen R. Cooper holds US$4.9m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	US$1.2m	US$1.1m	8%
Other	US$15m	US$12m	92%
Total Compensation	US$16m	US$13m	100%

On an industry level, roughly 14% of total compensation represents salary and 86% is other remuneration. Lincoln National sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's 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 25% per year. It achieved revenue growth of 55% over the last year.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Lincoln National Corporation Been A Good Investment?

With a three year total loss of 23% for the shareholders, Lincoln National Corporation would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. In the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan is in line with their expectations.

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 3 warning signs for Lincoln National that you should be aware of before investing.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.