In 2012 Kevin Lobo was appointed CEO of Stryker Corporation (NYSE:SYK). First, this article will compare CEO compensation with compensation at 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does Kevin Lobo's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Stryker Corporation has a market cap of US$80b, and is paying total annual CEO compensation of US$14m. (This figure is 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. 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. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
So Kevin Lobo is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see a visual representation of the CEO compensation at Stryker, below.
Is Stryker Corporation Growing?
Over the last three years Stryker Corporation has grown its earnings per share (EPS) by an average of 29% per year (using a line of best fit). In the last year, its revenue is up 8.9%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.
Has Stryker Corporation Been A Good Investment?
Boasting a total shareholder return of 91% over three years, Stryker Corporation has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Remuneration for Kevin Lobo is close enough to the median pay for a CEO of a large company .
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. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Stryker (free visualization of insider trades).
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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