In 2013 Steve MacMillan was appointed CEO of Hologic, Inc. (NASDAQ:HOLX). First, this article will compare CEO compensation with compensation at other large companies. 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 Steve MacMillan's Compensation Compare With Similar Sized Companies?
According to our data, Hologic, Inc. has a market capitalization of US$14b, and paid its CEO total annual compensation worth US$42m over the year to September 2018. While we always look at total compensation first, we note that the salary component is less, at US$1.0m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations over US$8.0b and the 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.
As you can see, Steve MacMillan is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean Hologic, Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Hologic has changed from year to year.
Is Hologic, Inc. Growing?
Over the last three years Hologic, Inc. has shrunk its earnings per share by an average of 83% per year (measured with a line of best fit). It achieved revenue growth of 4.6% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Hologic, Inc. Been A Good Investment?
Hologic, Inc. has served shareholders reasonably well, with a total return of 30% over three years. 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 total CEO remuneration at Hologic, Inc. with the amount paid at other large companies. We found that it pays well over the median amount paid in the benchmark group.
Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. And shareholder returns are decent but not great. So you may want to delve deeper, because we don't think the CEO pay is too low. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Hologic (free visualization of insider trades).
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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