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Walt Rosebrough has been the CEO of STERIS plc (NYSE:STE) since 2007, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing STERIS plc's CEO Compensation With the industry
According to our data, STERIS plc has a market capitalization of US$16b, and paid its CEO total annual compensation worth US$6.5m over the year to March 2020. That's just a smallish increase of 8.0% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$915k.
For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$10m. In other words, STERIS pays its CEO lower than the industry median. What's more, Walt Rosebrough holds US$9.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Talking in terms of the industry, salary represented approximately 21% of total compensation out of all the companies we analyzed, while other remuneration made up 79% of the pie. STERIS sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at STERIS plc's Growth Numbers
STERIS plc's earnings per share (EPS) grew 43% per year over the last three years. Its revenue is up 4.3% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has STERIS plc Been A Good Investment?
Most shareholders would probably be pleased with STERIS plc for providing a total return of 114% 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.
As previously discussed, Walt is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. When taking into account the company's strong EPS growth over the past three years, it appears CEO compensation is modest. Plus, we can't ignore the impressive shareholder returns, and won't be surprised if some shareholders were to reward such excellent all-around performance with a raise.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for STERIS that you should be aware of before investing.
Switching gears from STERIS, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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