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Is Casella Waste Systems, Inc.'s (NASDAQ:CWST) CEO Salary Justified?

Simply Wall St

John Casella became the CEO of Casella Waste Systems, Inc. (NASDAQ:CWST) in 1993. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Casella Waste Systems

How Does John Casella's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Casella Waste Systems, Inc. has a market cap of US$2.2b, and is paying total annual CEO compensation of US$2.5m. (This is based on the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$536k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$4.1m.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

The graphic below shows how CEO compensation at Casella Waste Systems has changed from year to year.

NasdaqGS:CWST CEO Compensation, August 20th 2019

Is Casella Waste Systems, Inc. Growing?

On average over the last three years, Casella Waste Systems, Inc. has grown earnings per share (EPS) by 59% each year (using a line of best fit). In the last year, its revenue is up 12%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. You might want to check this free visual report on analyst forecasts for future earnings.

Has Casella Waste Systems, Inc. Been A Good Investment?

Boasting a total shareholder return of 391% over three years, Casella Waste Systems, Inc. has done well by shareholders. 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.

In Summary...

Casella Waste Systems, Inc. is currently paying its CEO below what is normal for companies of its size. Since the business is growing, many would argue this suggests the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think that John Casella 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. Shareholders may want to check for free if Casella Waste Systems insiders are buying or selling shares.

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.

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 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. Thank you for reading.