How Much Is West Pharmaceutical Services, Inc. (NYSE:WST) Paying Its CEO?
Eric Green has been the CEO of West Pharmaceutical Services, Inc. (NYSE:WST) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether West Pharmaceutical Services pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for West Pharmaceutical Services
How Does Total Compensation For Eric Green Compare With Other Companies In The Industry?
According to our data, West Pharmaceutical Services, Inc. has a market capitalization of US$20b, and paid its CEO total annual compensation worth US$6.5m over the year to December 2019. Notably, that's an increase of 21% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$936k.
In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$9.9m. Accordingly, West Pharmaceutical Services pays its CEO under the industry median. What's more, Eric Green holds US$20m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$936k | US$880k | 14% |
Other | US$5.6m | US$4.5m | 86% |
Total Compensation | US$6.5m | US$5.4m | 100% |
On an industry level, around 21% of total compensation represents salary and 79% is other remuneration. West Pharmaceutical Services sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at West Pharmaceutical Services, Inc.'s Growth Numbers
West Pharmaceutical Services, Inc. has seen its earnings per share (EPS) increase by 18% a year over the past three years. Its revenue is up 14% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has West Pharmaceutical Services, Inc. Been A Good Investment?
Boasting a total shareholder return of 181% over three years, West Pharmaceutical Services, Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
As previously discussed, Eric is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Considering robust EPS growth, we believe Eric to be modestly paid. 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.
So you may want to check if insiders are buying West Pharmaceutical Services shares with their own money (free access).
Switching gears from West Pharmaceutical Services, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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