Shareholders May Not Be So Generous With Linde plc's (NYSE:LIN) CEO Compensation And Here's Why

CEO Steve Angel has done a decent job of delivering relatively good performance at Linde plc (NYSE:LIN) recently. As shareholders go into the upcoming AGM on 26 July 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Linde

Comparing Linde plc's CEO Compensation With the industry

According to our data, Linde plc has a market capitalization of US$147b, and paid its CEO total annual compensation worth US$19m over the year to December 2020. Notably, that's a decrease of 17% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.5m.

In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$12m. Hence, we can conclude that Steve Angel is remunerated higher than the industry median. Moreover, Steve Angel also holds US$141m worth of Linde stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	US$1.5m	US$1.5m	8%
Other	US$17m	US$21m	92%
Total Compensation	US$19m	US$22m	100%

Speaking on an industry level, nearly 17% of total compensation represents salary, while the remainder of 83% is other remuneration. It's interesting to note that Linde allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Linde plc's Growth

Linde plc has seen its earnings per share (EPS) increase by 6.4% a year over the past three years. Revenue was pretty flat on last year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Linde plc Been A Good Investment?

Most shareholders would probably be pleased with Linde plc for providing a total return of 84% 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.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

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 1 warning sign for Linde that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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