Giovanni Caforio has been the CEO of Bristol-Myers Squibb Company (NYSE:BMY) since 2015. This analysis aims first to contrast CEO compensation with other large companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Giovanni Caforio's Compensation Compare With Similar Sized Companies?
Our data indicates that Bristol-Myers Squibb Company is worth US$82b, and total annual CEO compensation is US$19m. (This figure is for the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$1.6m. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
As you can see, Giovanni Caforio is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean Bristol-Myers Squibb Company is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at Bristol-Myers Squibb, below.
Is Bristol-Myers Squibb Company Growing?
Over the last three years Bristol-Myers Squibb Company has grown its earnings per share (EPS) by an average of 6.8% per year (using a line of best fit). In the last year, its revenue is up 10%.
This revenue growth could really point to a brighter future. And, while modest, the earnings per share growth is noticeable. Although we'll stop short of calling the stock a top performer, we think the company has potential. Shareholders might be interested in this free visualization of analyst forecasts.
Has Bristol-Myers Squibb Company Been A Good Investment?
Given the total loss of 2.9% over three years, many shareholders in Bristol-Myers Squibb Company are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared total CEO remuneration at Bristol-Myers Squibb Company with the amount paid at other large companies. We found that it pays well over the median amount paid in the benchmark group.
The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. Shareholders may wish to consider further research. Although we don't think the CEO pay is too high, it is probably more on the generous side of things. Whatever your view on compensation, you might want to check if insiders are buying or selling Bristol-Myers Squibb shares (free trial).
Important note: Bristol-Myers Squibb 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.
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