In 2000 Mike Mussallem was appointed CEO of Edwards Lifesciences Corporation (NYSE:EW). This analysis aims first to contrast CEO compensation with other large companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Mike Mussallem's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Edwards Lifesciences Corporation has a market cap of US$48b, and reported total annual CEO compensation of US$10m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$1.0m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. 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.
So Mike Mussallem receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Edwards Lifesciences has changed from year to year.
Is Edwards Lifesciences Corporation Growing?
Over the last three years Edwards Lifesciences Corporation has grown its earnings per share (EPS) by an average of 9.3% per year (using a line of best fit). Its revenue is up 14% over last year.
I think the revenue growth is good. And the improvement in earnings per share is modest but respectable. So while performance isn't amazing, we think it really does seem quite respectable. Shareholders might be interested in this free visualization of analyst forecasts.
Has Edwards Lifesciences Corporation Been A Good Investment?
I think that the total shareholder return of 148%, over three years, would leave most Edwards Lifesciences Corporation 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.
Remuneration for Mike Mussallem is close enough to the median pay for a CEO of a large company .
The company isn't showing particularly great growth, but shareholder returns have been pleasing. So all things considered I'd venture that the CEO pay is appropriate. Shareholders may want to check for free if Edwards Lifesciences 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.
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