Hikmet Ersek became the CEO of The Western Union Company (NYSE:WU) in 2010. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Hikmet Ersek's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that The Western Union Company has a market cap of US$11b, and reported total annual CEO compensation of US$9.2m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, 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. 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. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
That means Hikmet Ersek receives fairly typical remuneration for the CEO of a large company. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at Western Union has changed from year to year.
Is The Western Union Company Growing?
Over the last three years The Western Union Company has grown its earnings per share (EPS) by an average of 41% per year (using a line of best fit). Its revenue is down 4.3% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. You might want to check this free visual report on analyst forecasts for future earnings.
Has The Western Union Company Been A Good Investment?
The Western Union Company has generated a total shareholder return of 32% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
Remuneration for Hikmet Ersek is close enough to the median pay for a CEO of a large company .
We would wish for better returns (whether dividends or capital gains) but we do admire the solid EPS growth on show here. So upon reflection one could argue that the CEO pay is quite reasonable. So you may want to check if insiders are buying Western Union shares with their own money (free access).
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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