James Foster became the CEO of Charles River Laboratories International, Inc. (NYSE:CRL) in 1992. 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 method should give us information to assess how appropriately the company pays the CEO.
How Does James Foster's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Charles River Laboratories International, Inc. has a market cap of US$8.4b, and reported total annual CEO compensation of US$14m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$1.2m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from US$4.0b to US$12b, and the median CEO total compensation was US$6.3m.
Thus we can conclude that James Foster receives more in total compensation than the median of a group of companies in the same market, and of similar size to Charles River Laboratories International, Inc.. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Charles River Laboratories International has changed from year to year.
Is Charles River Laboratories International, Inc. Growing?
On average over the last three years, Charles River Laboratories International, Inc. has grown earnings per share (EPS) by 15% each year (using a line of best fit). It achieved revenue growth of 16% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. 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 Charles River Laboratories International, Inc. Been A Good Investment?
Boasting a total shareholder return of 93% over three years, Charles River Laboratories International, Inc. has done well by shareholders. 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.
We compared the total CEO remuneration paid by Charles River Laboratories International, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. On top of that, in the same period, returns to shareholders have been great. So, considering this good performance, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying Charles River Laboratories International shares with their own money (free access).
Important note: Charles River Laboratories International 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 firstname.lastname@example.org. 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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