Why Lumentum Holdings Inc.'s (NASDAQ:LITE) CEO Pay Matters To You

Simply Wall St
·3 min read

Alan Lowe became the CEO of Lumentum Holdings Inc. (NASDAQ:LITE) in 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Lumentum Holdings

How Does Alan Lowe's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Lumentum Holdings Inc. has a market cap of US$5.4b, and reported total annual CEO compensation of US$9.3m for the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$785k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$7.2m.

So Alan Lowe is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

The graphic below shows how CEO compensation at Lumentum Holdings has changed from year to year.

NasdaqGS:LITE CEO Compensation, March 14th 2020
NasdaqGS:LITE CEO Compensation, March 14th 2020

Is Lumentum Holdings Inc. Growing?

Over the last three years Lumentum Holdings Inc. has grown its earnings per share (EPS) by an average of 16% per year (using a line of best fit). In the last year, its revenue is up 31%.

This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. You might want to check this free visual report on analyst forecasts for future earnings.

Has Lumentum Holdings Inc. Been A Good Investment?

Boasting a total shareholder return of 46% over three years, Lumentum Holdings Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Alan Lowe is paid around what is normal for the leaders of comparable size companies.

The company is growing earnings per share and total shareholder returns have been pleasing. Indeed, many might consider the pay rather modest, given the solid company performance! CEO compensation is an important area to keep your eyes on, but we've also identified 3 warning signs for Lumentum Holdings (1 shouldn't be ignored!) 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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

  • Up next
  • Up next
  • Up next
  • Up next

Latest Stories

  • Clearwater Analytics Holdings Inc (CWAN) Q1 2024 Earnings Call Transcript Highlights: Robust ...

    Discover how CWAN achieved significant revenue growth and strategic expansion in the first quarter of 2024.

  • ‘Those two weeks felt how the world should be’: the young single mums who took on the housing crisis – and won

    When a group of teenage mothers were evicted from their homeless hostel, Focus E15, they took over a tower block of empty council flats in protest. Ten years on, they are still fighting

  • Several Injured Following Missile Strike on Odesa

    At least 14 people were injured in a Russian missile strike on the Ukrainian city of Odesa early on Thursday morning, May 2, according to a local official.Oleg Kiper, the head of Odesa government, said one man was hospitalized in a moderate condition.Civilian infrastructure was damaged, in particular, post office warehouses, Kiper said.Eighteen employees of the Nova Poshta service were on shift during the attack and managed to hide in shelters, the company’s founder, Volodymyr Popereshniuk, said. Approximately 900 parcels were damaged, he added.Nova Poshta said no employees were injured.Footage released by Odesa Mayor Gennadiy Trukhanov shows crews tackling fire at a warehouse. Credit: Gennadiy Trukhanov via Storyful

  • Beyonce added to new edition of French dictionary Le Petit Larousse

    Beyonce will be included as a new entry in the latest edition of the French encyclopaedic dictionary Le Petit Larousse. The American popstar will feature alongside celebrities including Cate Blanchett, French actor Omar Sy, Oppenheimer director Christopher Nolan, and French rugby captain Antoine Dupont in the 120th edition of the popular dictionary. Many "reflect concerns, developments or strong movements this year," Carine Girac-Marinier, director of the dictionaries and encyclopaedias department, told French news magazine Le Point.

  • Carbon surcharges on fuel to compensate oil companies in N.B. too high, EUB rules

    New Brunswick's Energy and Utilities Board is set to lower the amount consumers can be charged to compensate oil companies for federal clean-fuel regulations, following a review of a formula that has been in place for 10 months. The reduction coming this Friday appears to be in the 10 per cent range. It is not as significant as critics of the formula argued for at hearings last winter but does suggest New Brunswick consumers have been subject to higher charges than necessary since last July."The

  • Five things to know about the NHL playoffs

    The Edmonton Oilers are, so far, the only Canadian team to punch their ticket to the second round of the NHL playoffs. The Vancouver Canucks can make it two teams with a victory Friday in Nashville, or Sunday in Vancouver. The only game in the NHL tonight is in Toronto, where the Boston Bruins can finish off the Maple Leafs at Scotiabank Arena, or make plans for another Game 7 showdown at TD Garden. Here are five things to know about the NHL playoffs: OILERS COMPLETE PLAYOFF 'HAT TRICK' The Los

  • SC anti-transgender bill could require schools to notify parents of kids name, gender changes

    Should SC schools notify parents of student gender, name change? Lawmakers think so

  • Front-runners for SNP leadership to announce intentions

    John Swinney and Kate Forbes are on Thursday expected to set out whether they wish to run for the top job.

  • Tens of millions secretly use WhatsApp despite bans

    Will Cathcart reveals how many people are secretly using his app in countries where it is banned.

  • Peter Andre and wife Emily finally decide on name for newborn daughter

    The couple’s third child was born a month ago.

  • Reform UK leader reminds voters to bring their IDs

    The leader of Reform UK Richard Tice reminds voters to bring their IDs as local and mayoral elections begin across England. .

  • Flood advisory affecting Denton and Tarrant counties until Thursday morning, according to the NWS

    Get the latest information on the current flood advisory with our updates

  • Several injured as missile hits Odesa post depot - authorities

    STORY: The head of the Nova Poshta postal and courier company, Volodymyr Popereshniuk, said on Facebook that all 18 employees on duty had made their way safely to a bomb shelter before the missile hit a loading section of the depot.Pictures and video posted online showed flames and billowing clouds of smoke engulfing buildings and firefighters training their hoses on areas still ablaze. Most of the loading area appeared to have been reduced to a shell.Odesa is a frequent target of Russian attacks and missiles have hit sites in the city over the past two days, killing eight people.Many of the attacks since Russia launched its invasion in February 2022 have singled out the city's port infrastructure.

  • Cousin of Iranian rapper sentenced to death fights tears

    The cousin of Iranian rapper Toomaj Salehi, who has been sentenced to death for supporting anti-government protests, fights back tears as she describes her devastation that Iranians “should think about dear people being executed”. .

  • Cheetah mesmerized by girl's plushie

    This is the adorable moment a cheetah in its enclosure at a zoo in Fort Worth, Texas approaches a girl and is mesmerized by her cheetah plushie on April 27.

  • I tracked down M&S's 'designer' jacket and it looks just as expensive as shoppers say

    This smart and classic tweed jacket has quickly risen to become an M&S best-seller and it's easy to see why.

  • AI must not be allowed to control nuclear weapons, US official warns China and Russia

    Washington has made ‘strong commitment’ underlining that humans have total control over nuclear weapons, State Department official says

  • Good Morning Maryland Thursday Weather - Stevie Daniels

    Good Morning Maryland Thursday Weather - Stevie Daniels

  • Whales Join Paddleboarder During 'Amazing' Day on the Water

    A Californian paddleboarder said he was “exhilarated” to cross paths with three fin whales off the coast of Dana Point during an “amazing” day on the water recently.“I was watching this fin whale off to my right when unbeknownst to me a pair was about to surface right in front of me,” Bill Clements told Storyful. “I was so surprised but exhilarated to be paddling with a group of three … It was an amazing day!” Credit: @paddlegoat via Storyful

  • UK forecast for slowest growth of richest nations next year

    The UK economy will remain “sluggish” due to the impact of interest rate rises, the OECD says.