Jon Feltheimer has been the CEO of Lions Gate Entertainment Corp. (NYSE:LGF.A) since 2000, and this article will examine the executive’s compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Lions Gate Entertainment.
See our latest analysis for Lions Gate Entertainment
How Does Total Compensation For Jon Feltheimer Compare With Other Companies In The Industry?
At the time of writing, our data shows that Lions Gate Entertainment Corp. has a market capitalization of US$2.4b, and reported total annual CEO compensation of US$11m for the year to March 2020. We note that’s an increase of 67% above last year. While this analysis focuses on total compensation, it’s worth acknowledging that the salary portion is lower, valued at US$1.5m.
On examining similar-sized companies in the industry with market capitalizations between US$1.0b and US$3.2b, we discovered that the median CEO total compensation of that group was US$7.1m. This suggests that Jon Feltheimer is paid more than the median for the industry. What’s more, Jon Feltheimer holds US$16m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, roughly 19% of total compensation represents salary and 81% is other remuneration. Lions Gate Entertainment 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.
A Look at Lions Gate Entertainment Corp.’s Growth Numbers
Over the last three years, Lions Gate Entertainment Corp. has shrunk its earnings per share by 93% per year. Its revenue is down 7.7% over the previous year.
Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Lions Gate Entertainment Corp. Been A Good Investment?
Since shareholders would have lost about 64% over three years, some Lions Gate Entertainment Corp. investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
As we noted earlier, Lions Gate Entertainment pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Unfortunately, this doesn’t look great when you see shareholder returns have been negative over the last three years. Arguably worse, we’ve been waiting for positive EPS growth for the last three years. Considering such poor performance, we think shareholders might be concerned if the CEO’s compensation were to grow.
CEO compensation is an important area to keep your eyes on, but we’ve also need to pay attention to other attributes of the company. We identified 2 warning signs for Lions Gate Entertainment (1 is significant!) that you should be aware of before investing here.
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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