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This article will reflect on the compensation paid to Todd Nelson who has served as CEO of Perdoceo Education Corporation (NASDAQ:PRDO) since 2015. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Perdoceo Education.
View our latest analysis for Perdoceo Education
Comparing Perdoceo Education Corporation’s CEO Compensation With the industry
According to our data, Perdoceo Education Corporation has a market capitalization of US$1.2b, and paid its CEO total annual compensation worth US$7.5m over the year to December 2019. That’s a modest increase of 3.9% on the prior year. While this analysis focuses on total compensation, it’s worth acknowledging that the salary portion is lower, valued at US$770k.
For comparison, other companies in the same industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$3.1m. This suggests that Todd Nelson is paid more than the median for the industry. What’s more, Todd Nelson holds US$2.9m 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 18% of total compensation represents salary and 82% is other remuneration. Perdoceo Education 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.
Perdoceo Education Corporation’s Growth
Perdoceo Education Corporation’s earnings per share (EPS) grew 102% per year over the last three years. In the last year, its revenue is up 8.4%.
Shareholders would be glad to know that the company has improved itself over the last few years. It’s also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Perdoceo Education Corporation Been A Good Investment?
We think that the total shareholder return of 78%, over three years, would leave most Perdoceo Education Corporation shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As we noted earlier, Perdoceo Education pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But earnings growth and shareholder returns have been top-notch for the past three years. Considering such exceptional results for the company, we’d venture to say CEO compensation is fair. And given most shareholders are probably very happy with recent returns, they might even think that Todd deserves a raise!
CEO compensation can have a massive impact on performance, but it’s just one element. We’ve identified 2 warning signs for Perdoceo Education that investors should be aware of in a dynamic business environment.
Important note: Perdoceo Education 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.
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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