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Is Covanta Holding Corporation's (NYSE:CVA) CEO Pay Justified?

Simply Wall St

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Steve Jones became the CEO of Covanta Holding Corporation (NYSE:CVA) in 2015. First, this article will compare CEO compensation with compensation at similar sized companies. 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.

Check out our latest analysis for Covanta Holding

How Does Steve Jones's Compensation Compare With Similar Sized Companies?

According to our data, Covanta Holding Corporation has a market capitalization of US$2.4b, and pays its CEO total annual compensation worth US$4.6m. (This is based on the year to December 2018). That's a fairly small increase of 6.0% on year before. We think total compensation is more important but we note that the CEO salary is lower, at US$800k. 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$3.9m.

So Steve Jones receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see a visual representation of the CEO compensation at Covanta Holding, below.

NYSE:CVA CEO Compensation, May 6th 2019

Is Covanta Holding Corporation Growing?

Over the last three years Covanta Holding Corporation has grown its earnings per share (EPS) by an average of 47% per year (using a line of best fit). Its revenue is up 3.2% over last year.

This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.

Has Covanta Holding Corporation Been A Good Investment?

Most shareholders would probably be pleased with Covanta Holding Corporation for providing a total return of 34% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Steve Jones is paid around the same as most CEOs of similar size companies.

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. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Covanta Holding.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.