Our View On Casella Waste Systems' (NASDAQ:CWST) CEO Pay
John Casella became the CEO of Casella Waste Systems, Inc. (NASDAQ:CWST) in 1993, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Casella Waste Systems
Comparing Casella Waste Systems, Inc.'s CEO Compensation With the industry
According to our data, Casella Waste Systems, Inc. has a market capitalization of US$2.8b, and paid its CEO total annual compensation worth US$2.7m over the year to December 2019. That's a fairly small increase of 7.9% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$575k.
On comparing similar companies from the same industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$4.6m. That is to say, John Casella is paid under the industry median. What's more, John Casella holds US$31m 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$575k | US$536k | 21% |
Other | US$2.1m | US$2.0m | 79% |
Total Compensation | US$2.7m | US$2.5m | 100% |
On an industry level, around 23% of total compensation represents salary and 77% is other remuneration. Casella Waste Systems is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Casella Waste Systems, Inc.'s Growth Numbers
Over the past three years, Casella Waste Systems, Inc. has seen its earnings per share (EPS) grow by 96% per year. In the last year, its revenue is up 9.3%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Casella Waste Systems, Inc. Been A Good Investment?
We think that the total shareholder return of 169%, over three years, would leave most Casella Waste Systems, Inc. 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 noted earlier, Casella Waste Systems pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Since EPS growth is heading in a positive direction; many would agree with our assessment that the pay 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. In our study, we found 3 warning signs for Casella Waste Systems you should be aware of, and 1 of them shouldn't be ignored.
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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