Does Brooks Automation's (NASDAQ:BRKS) CEO Salary Compare Well With Industry Peers?
Steve Schwartz has been the CEO of Brooks Automation, Inc. (NASDAQ:BRKS) since 2010, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Brooks Automation.
View our latest analysis for Brooks Automation
How Does Total Compensation For Steve Schwartz Compare With Other Companies In The Industry?
According to our data, Brooks Automation, Inc. has a market capitalization of US$3.8b, and paid its CEO total annual compensation worth US$4.0m over the year to September 2019. This means that the compensation hasn't changed much from last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$668k.
For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$5.7m. This suggests that Steve Schwartz is paid below the industry median. Furthermore, Steve Schwartz directly owns US$28m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$668k | US$644k | 17% |
Other | US$3.3m | US$3.3m | 83% |
Total Compensation | US$4.0m | US$3.9m | 100% |
On an industry level, roughly 14% of total compensation represents salary and 86% is other remuneration. It's interesting to note that Brooks Automation pays out a greater portion of remuneration through salary, compared to the industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Brooks Automation, Inc.'s Growth Numbers
Brooks Automation, Inc. has reduced its earnings per share by 11% a year over the last three years. It achieved revenue growth of 15% over the last year.
Few shareholders would be pleased to read that EPS have declined. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Brooks Automation, Inc. Been A Good Investment?
We think that the total shareholder return of 101%, over three years, would leave most Brooks Automation, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
As we touched on above, Brooks Automation, Inc. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. And while EPS growth is in the red, shareholder returns have been great over the last three years, so that's certainly a bright spot! We would like to see EPS growth, but in our view CEO compensation is modest.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for Brooks Automation that you should be aware of before investing.
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.
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