How Should Investors React To WEX Inc.'s (NYSE:WEX) CEO Pay?
Melissa Smith became the CEO of WEX Inc. (NYSE:WEX) in 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for WEX
How Does Melissa Smith's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that WEX Inc. has a market cap of US$8.9b, and is paying total annual CEO compensation of US$5.6m. (This is based on the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$730k. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$6.9m.
That means Melissa Smith receives fairly typical remuneration for the CEO of a company that size. 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 WEX has changed from year to year.
Is WEX Inc. Growing?
WEX Inc. has increased its earnings per share (EPS) by an average of 30% a year, over the last three years (using a line of best fit). It achieved revenue growth of 15% over the last year.
This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has WEX Inc. Been A Good Investment?
Boasting a total shareholder return of 109% over three years, WEX Inc. has done well by shareholders. 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.
In Summary...
Melissa Smith is paid around the same as most CEOs of similar size companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. So one could argue the CEO compensation is quite modest, if you consider company performance! So you may want to check if insiders are buying WEX shares with their own money (free access).
Important note: WEX 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 editorial-team@simplywallst.com. 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.
