In 2015 Mike McMullen was appointed CEO of Agilent Technologies, Inc. (NYSE:A). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Mike McMullen's Compensation Compare With Similar Sized Companies?
Our data indicates that Agilent Technologies, Inc. is worth US$26b, and total annual CEO compensation was reported as US$12m for the year to October 2018. While we always look at total compensation first, we note that the salary component is less, at US$1.2m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
That means Mike McMullen receives fairly typical remuneration for the CEO of a large company. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at Agilent Technologies, below.
Is Agilent Technologies, Inc. Growing?
Agilent Technologies, Inc. has increased its earnings per share (EPS) by an average of 34% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 5.1%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. You might want to check this free visual report on analyst forecasts for future earnings.
Has Agilent Technologies, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Agilent Technologies, Inc. for providing a total return of 72% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Remuneration for Mike McMullen is close enough to the median pay for a CEO of a large company .
The company is growing earnings per share and total shareholder returns have been pleasing. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. So you may want to check if insiders are buying Agilent Technologies shares with their own money (free access).
Important note: Agilent Technologies 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.
If you spot an error that warrants correction, please contact the editor at email@example.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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