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How Much is Leaf Group's (NYSE:LEAF) CEO Getting Paid?

Sean Moriarty has been the CEO of Leaf Group Ltd. (NYSE:LEAF) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Leaf Group

Comparing Leaf Group Ltd.'s CEO Compensation With the industry

According to our data, Leaf Group Ltd. has a market capitalization of US$159m, and paid its CEO total annual compensation worth US$2.5m over the year to December 2019. That's a notable increase of 9.7% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$400k.

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For comparison, other companies in the same industry with market capitalizations ranging between US$100m and US$400m had a median total CEO compensation of US$510k. Accordingly, our analysis reveals that Leaf Group Ltd. pays Sean Moriarty north of the industry median. Moreover, Sean Moriarty also holds US$2.2m worth of Leaf Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2019

2018

Proportion (2019)

Salary

US$400k

US$400k

16%

Other

US$2.1m

US$1.9m

84%

Total Compensation

US$2.5m

US$2.3m

100%

Talking in terms of the industry, salary represented approximately 19% of total compensation out of all the companies we analyzed, while other remuneration made up 81% of the pie. In Leaf Group's case, non-salary compensation represents a greater slice of total remuneration, 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.

ceo-compensation
ceo-compensation

A Look at Leaf Group Ltd.'s Growth Numbers

Leaf Group Ltd. has seen its earnings per share (EPS) increase by 20% a year over the past three years. Its revenue is up 7.8% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Leaf Group Ltd. Been A Good Investment?

With a three year total loss of 23% for the shareholders, Leaf Group Ltd. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As previously discussed, Sean is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, the EPS growth is certainly impressive, but it's disappointing to see negative shareholder returns over the same period. Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.

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 Leaf Group that you should be aware of before investing.

Important note: Leaf Group 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.

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