How Should Investors React To Quest Diagnostics Incorporated’s (NYSE:DGX) CEO Pay?
Steve Rusckowski has been the CEO of Quest Diagnostics Incorporated (NYSE:DGX) since 2012. First, this article will compare CEO compensation with compensation at other large companies. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Quest Diagnostics
How Does Steve Rusckowski’s Compensation Compare With Similar Sized Companies?
Our data indicates that Quest Diagnostics Incorporated is worth US$12b, and total annual CEO compensation is US$10m. (This number is for the twelve months until 2017). While we always look at total compensation first, we note that the salary component is less, at US$1.1m. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO 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 Steve Rusckowski receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Quest Diagnostics has changed from year to year.
Is Quest Diagnostics Incorporated Growing?
Quest Diagnostics Incorporated has increased its earnings per share (EPS) by an average of 6.7% a year, over the last three years Its revenue is up 6.3% over last year.
I’d prefer higher revenue growth, but the modest improvement in EPS is good. It’s clear the performance has been quite decent, but it it falls short of outstanding,based on this information.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Quest Diagnostics Incorporated Been A Good Investment?
Boasting a total shareholder return of 40% over three years, Quest Diagnostics Incorporated has done well by shareholders. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.
In Summary…
Steve Rusckowski is paid around what is normal the leaders of larger companies.
While we would like to see improved growth metrics, there is no doubt that the total returns have been great, over the last three years. So considering most shareholders would be happy, we’d say the CEO pay is appropriate. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Quest Diagnostics.
Or you might prefer examine intently this intuitive graph showing past earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
