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Is Quest Diagnostics Incorporated's (NYSE:DGX) CEO Salary Justified?

Simply Wall St

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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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View 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$13b, and pays its CEO total annual compensation worth US$10.0m. (This number is for the twelve months until December 2018). That's below the compensation, last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.1m. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$12m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

So Steve Rusckowski is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at Quest Diagnostics has changed from year to year.

NYSE:DGX CEO Compensation, May 31st 2019

Is Quest Diagnostics Incorporated Growing?

Over the last three years Quest Diagnostics Incorporated has grown its earnings per share (EPS) by an average of 4.4% per year (using a line of best fit). Revenue was pretty flat on last year.

I'm not particularly impressed by the revenue growth, but it is good to see 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 30% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Steve Rusckowski is paid around what is normal the leaders of larger companies.

We see room for improved growth, as well as fairly unremarkable returns over the last three years. But we don't think the CEO compensation is a problem. Shareholders may want to check for free if Quest Diagnostics insiders are buying or selling shares.

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.

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.