How Much is Quest Diagnostics' (NYSE:DGX) CEO Getting Paid?
Steve Rusckowski became the CEO of Quest Diagnostics Incorporated (NYSE:DGX) in 2012, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Quest Diagnostics.
Check out our latest analysis for Quest Diagnostics
How Does Total Compensation For Steve Rusckowski Compare With Other Companies In The Industry?
Our data indicates that Quest Diagnostics Incorporated has a market capitalization of US$17b, and total annual CEO compensation was reported as US$10m for the year to December 2019. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.1m.
In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$15m. That is to say, Steve Rusckowski is paid under the industry median. Moreover, Steve Rusckowski also holds US$30m worth of Quest Diagnostics stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$1.1m | US$1.1m | 11% |
Other | US$9.0m | US$8.9m | 89% |
Total Compensation | US$10m | US$10.0m | 100% |
On an industry level, around 18% of total compensation represents salary and 82% is other remuneration. Quest Diagnostics sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Quest Diagnostics Incorporated's Growth Numbers
Over the past three years, Quest Diagnostics Incorporated has seen its earnings per share (EPS) grow by 19% per year. Its revenue is up 9.4% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Quest Diagnostics Incorporated Been A Good Investment?
We think that the total shareholder return of 36%, over three years, would leave most Quest Diagnostics Incorporated shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
As we touched on above, Quest Diagnostics Incorporated is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. When taking into account the company's strong EPS growth over the past three years, it appears CEO compensation is modest. Plus, we can't ignore the impressive shareholder returns, and won't be surprised if some shareholders were to reward such excellent all-around performance with a raise.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 2 warning signs (and 1 which can't be ignored) in Quest Diagnostics we think you should know about.
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.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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