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Is MKS Instruments, Inc.’s (NASDAQ:MKSI) CEO Pay Justified?

Simply Wall St

In 2014 Jerry Colella was appointed CEO of MKS Instruments, Inc. (NASDAQ:MKSI). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for MKS Instruments

How Does Jerry Colella’s Compensation Compare With Similar Sized Companies?

According to our data, MKS Instruments, Inc. has a market capitalization of US$4.4b, and pays its CEO total annual compensation worth US$5.6m. (This figure is for the year to December 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$824k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$4.7m.

That means Jerry Colella receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

You can see a visual representation of the CEO compensation at MKS Instruments, below.

NasdaqGS:MKSI CEO Compensation, March 7th 2019

Is MKS Instruments, Inc. Growing?

On average over the last three years, MKS Instruments, Inc. has grown earnings per share (EPS) by 52% each year (using a line of best fit). It achieved revenue growth of 8.3% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s also good to see modest revenue growth, suggesting the underlying business is healthy. It could be important to check this free visual depiction of what analysts expect for the future.

Has MKS Instruments, Inc. Been A Good Investment?

Most shareholders would probably be pleased with MKS Instruments, Inc. for providing a total return of 145% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

Remuneration for Jerry Colella is close enough to the median pay for a CEO of a similar sized company .

Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Indeed, many might consider the pay rather modest, given the solid company performance! So you may want to check if insiders are buying MKS Instruments shares with their own money (free access).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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.