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Vince Forlenza became the CEO of Becton, Dickinson and Company (NYSE:BDX) in 2011. This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. 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 Vince Forlenza's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Becton, Dickinson and Company has a market cap of US$64b, and is paying total annual CEO compensation of US$15m. (This is based on the year to September 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$1.2m. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
As you can see, Vince Forlenza is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean Becton, Dickinson and Company is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Becton Dickinson, below.
Is Becton, Dickinson and Company Growing?
Over the last three years Becton, Dickinson and Company has shrunk its earnings per share by an average of 33% per year (measured with a line of best fit). It achieved revenue growth of 39% over the last year.
The reduction in earnings per share, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. Shareholders might be interested in this free visualization of analyst forecasts.
Has Becton, Dickinson and Company Been A Good Investment?
I think that the total shareholder return of 54%, over three years, would leave most Becton, Dickinson and Company shareholders smiling. 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.
We compared the total CEO remuneration paid by Becton, Dickinson and Company, and compared it to remuneration at a group of other large companies. We found that it pays well over the median amount paid in the benchmark group.
Over the last three years returns to investors have been great, though we might have liked stronger business growth. So, considering these tasty returns, the CEO compensation may be quite appropriate. Shareholders may want to check for free if Becton Dickinson insiders are buying or selling shares.
Important note: Becton Dickinson 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.
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 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. Thank you for reading.