Should You Be Pleased About The CEO Pay At Quest Diagnostics Incorporated's (NYSE:DGX)
In 2012 Steve Rusckowski was appointed CEO of Quest Diagnostics Incorporated (NYSE:DGX). This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for Quest Diagnostics
How Does Steve Rusckowski's Compensation Compare With Similar Sized Companies?
According to our data, Quest Diagnostics Incorporated has a market capitalization of US$14b, and paid its CEO total annual compensation worth US$10.0m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$1.1m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be 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 Steve Rusckowski receives a similar amount to the median CEO pay, amongst 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.
You can see a visual representation of the CEO compensation at Quest Diagnostics, below.
Is Quest Diagnostics Incorporated Growing?
On average over the last three years, Quest Diagnostics Incorporated has grown earnings per share (EPS) by 4.6% each year (using a line of best fit). It achieved revenue growth of 1.1% over the last year.
I would argue that the improvement in revenue isn't particularly impressive, but I'm happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. Shareholders might be interested in this free visualization of analyst forecasts.
Has Quest Diagnostics Incorporated Been A Good Investment?
Quest Diagnostics Incorporated has generated a total shareholder return of 21% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
Steve Rusckowski is paid around what is normal the leaders of larger companies.
The company isn't showing particularly great growth, and shareholder turns haven't been particularly inspiring in the last few years. But we don't think the CEO compensation is a problem. So you may want to check if insiders are buying Quest Diagnostics shares with their own money (free access).
If you want to buy a stock that is better than Quest Diagnostics, this free list of high return, low debt companies is a great place to look.
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.
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