Why Landstar System, Inc.'s (NASDAQ:LSTR) CEO Pay Matters To You

Jim Gattoni has been the CEO of Landstar System, Inc. (NASDAQ:LSTR) since 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Landstar System

How Does Jim Gattoni's Compensation Compare With Similar Sized Companies?

According to our data, Landstar System, Inc. has a market capitalization of US$4.0b, and paid its CEO total annual compensation worth US$2.6m over the year to December 2019. That's actually a decrease on the year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$500k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO total compensation was US$6.0m.

Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Landstar System. On a sector level, around 21% of total compensation represents salary and 79% is other remuneration. Landstar System does not set aside a larger portion of remuneration in the form of salary, maintaining the same rate as the wider market.

Most shareholders would consider it a positive that Jim Gattoni takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance. You can see a visual representation of the CEO compensation at Landstar System, below.

Is Landstar System, Inc. Growing?

Landstar System, Inc. has seen earnings per share (EPS) move positively by an average of 18% a year, over the last three years (using a line of best fit). Its revenue is down 13% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. It could be important to check this free visual depiction of what analysts expect for the future.

Has Landstar System, Inc. Been A Good Investment?

Landstar System, Inc. has served shareholders reasonably well, with a total return of 33% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

It looks like Landstar System, Inc. pays its CEO less than similar sized companies.

Many would consider this to indicate that the pay is modest since the business is growing. The total shareholder return might not be amazing, but that doesn't mean that Jim Gattoni is paid too much. It's good to see reasonable payment of the CEO, even while the business improves. But it would be nice if insiders were also buying shares. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Landstar System (free visualization of insider trades).

If you want to buy a stock that is better than Landstar System, this free list of high return, low debt companies is a great place to look.

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.

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