Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Jon Ayers became the CEO of IDEXX Laboratories, Inc. (NASDAQ:IDXX) in 2002. First, this article will compare CEO compensation with compensation at 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 Jon Ayers's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that IDEXX Laboratories, Inc. has a market cap of US$23b, and is paying total annual CEO compensation of US$6.8m. (This is based on the year to December 2018). That's just a smallish increase of 2.3% on last year. While we always look at total compensation first, we note that the salary component is less, at US$800k. 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.
Most shareholders would consider it a positive that Jon Ayers takes less in total compensation than the CEOs of most other large companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see, below, how CEO compensation at IDEXX Laboratories has changed over time.
Is IDEXX Laboratories, Inc. Growing?
IDEXX Laboratories, Inc. has increased its earnings per share (EPS) by an average of 25% a year, over the last three years (using a line of best fit). It achieved revenue growth of 10% 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 IDEXX Laboratories, Inc. Been A Good Investment?
Most shareholders would probably be pleased with IDEXX Laboratories, Inc. for providing a total return of 198% over three years. 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.
It looks like IDEXX Laboratories, Inc. pays its CEO less than the average at large companies. Since the business is growing, many would argue this suggests the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Jon Ayers deserves a raise!
Most shareholders like to see a modestly paid CEO combined with strong performance by the company. It would be even more positive if company insiders are buying shares. Shareholders may want to check for free if IDEXX Laboratories insiders are buying or selling shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.