In 2016 Dave Zapico was appointed CEO of AMETEK, Inc. (NYSE:AME). First, this article will compare CEO compensation with compensation at other large 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does Dave Zapico's Compensation Compare With Similar Sized Companies?
Our data indicates that AMETEK, Inc. is worth US$23b, and total annual CEO compensation was reported as US$8.8m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$1.2m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. 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. 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 Dave Zapico is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at AMETEK has changed from year to year.
Is AMETEK, Inc. Growing?
Over the last three years AMETEK, Inc. has grown its earnings per share (EPS) by an average of 20% per year (using a line of best fit). It achieved revenue growth of 8.6% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings.
Has AMETEK, Inc. Been A Good Investment?
I think that the total shareholder return of 106%, over three years, would leave most AMETEK, Inc. shareholders smiling. 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.
Dave Zapico is paid around the same as most CEOs of large companies.
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. Shareholders may want to check for free if AMETEK insiders are buying or selling shares.
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.
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