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In 2014 Michael Burke was appointed CEO of AECOM (NYSE:ACM). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. This process should give us an idea about how appropriately the CEO is paid.
How Does Michael Burke's Compensation Compare With Similar Sized Companies?
Our data indicates that AECOM is worth US$4.8b, and total annual CEO compensation is US$16m. (This figure is for the year to September 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.5m. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$4.8m.
It would therefore appear that AECOM pays Michael Burke more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at AECOM, below.
Is AECOM Growing?
AECOM has increased its earnings per share (EPS) by an average of 31% a year, over the last three years (using a line of best fit). It achieved revenue growth of 8.1% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.
Has AECOM Been A Good Investment?
AECOM has generated a total shareholder return of 2.3% over three years, so most shareholders wouldn't be too disappointed. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We compared the total CEO remuneration paid by AECOM, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. Looking at the same time period, we think that the shareholder returns are respectable. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't call the CEO pay problematic. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling AECOM (free visualization of insider trades).
Important note: AECOM 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 firstname.lastname@example.org. 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.