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Chris Rondeau has been the CEO of Planet Fitness, Inc. (NYSE:PLNT) since 2013. 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for Planet Fitness
How Does Chris Rondeau’s Compensation Compare With Similar Sized Companies?
Our data indicates that Planet Fitness, Inc. is worth US$7.1b, and total annual CEO compensation is US$4.4m. (This figure is for the year to December 2018). That’s a fairly small increase of 6.9% on year before. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$700k. 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$7.0m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it’s important we delve into the performance of the actual business.
The graphic below shows how CEO compensation at Planet Fitness has changed from year to year.
Is Planet Fitness, Inc. Growing?
Planet Fitness, Inc. has increased its earnings per share (EPS) by an average of 46% a year, over the last three years (using a line of best fit). It achieved revenue growth of 24% over the last year.
This demonstrates that the company has been improving recently. A good result. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Planet Fitness, Inc. Been A Good Investment?
I think that the total shareholder return of 370%, over three years, would leave most Planet Fitness, Inc. shareholders smiling. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
It looks like Planet Fitness, Inc. pays its CEO less than similar sized companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think that Chris Rondeau deserves a raise!
Most shareholders like to see a modestly paid CEO combined with strong performance by the company. But it is even better if company insiders are also buying shares with their own money. So you may want to check if insiders are buying Planet Fitness shares with their own money (free access).
Important note: Planet Fitness may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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.
If you spot an error that warrants correction, please contact the editor at [email protected] 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. Thank you for reading.
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