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What Does Agilent Technologies' (NYSE:A) CEO Pay Reveal?

Simply Wall St

This article will reflect on the compensation paid to Mike McMullen who has served as CEO of Agilent Technologies, Inc. (NYSE:A) since 2015. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Agilent Technologies.

Check out our latest analysis for Agilent Technologies

Comparing Agilent Technologies, Inc.'s CEO Compensation With the industry

According to our data, Agilent Technologies, Inc. has a market capitalization of US$31b, and paid its CEO total annual compensation worth US$13m over the year to October 2019. That's a fairly small increase of 6.9% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.2m.

On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$8.8m. Accordingly, our analysis reveals that Agilent Technologies, Inc. pays Mike McMullen north of the industry median. What's more, Mike McMullen holds US$35m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2019

2018

Proportion (2019)

Salary

US$1.2m

US$1.2m

10%

Other

US$11m

US$11m

90%

Total Compensation

US$13m

US$12m

100%

Talking in terms of the industry, salary represented approximately 15% of total compensation out of all the companies we analyzed, while other remuneration made up 85% of the pie. Agilent Technologies pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

Agilent Technologies, Inc.'s Growth

Agilent Technologies, Inc.'s earnings per share (EPS) grew 4.5% per year over the last three years. It achieved revenue growth of 2.6% over the last year.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Agilent Technologies, Inc. Been A Good Investment?

Boasting a total shareholder return of 56% over three years, Agilent Technologies, 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.

To Conclude...

As we noted earlier, Agilent Technologies pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But shareholder returns have been positive for the last three years. On the other hand, EPS growth — over the same period — is not as impressive. All things considered, we don't think there's a reason to criticize CEO compensation, though we hope Agilent Technologies will post healthier EPS growth moving forward.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for Agilent Technologies that investors should be aware of in a dynamic business environment.

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

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.