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Is Waste Management, Inc. (NYSE:WM) Overpaying Its CEO?

Simply Wall St

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In 2016 Jim Fish was appointed CEO of Waste Management, Inc. (NYSE:WM). First, this article will compare CEO compensation with compensation at other large companies. Then we'll look at a snap shot of the business growth. 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.

Check out our latest analysis for Waste Management

How Does Jim Fish's Compensation Compare With Similar Sized Companies?

Our data indicates that Waste Management, Inc. is worth US$45b, and total annual CEO compensation is US$9.1m. (This figure is for the year to December 2018). That's a fairly small increase of 1.5% on year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.2m. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).

That means Jim Fish receives fairly typical remuneration for the CEO of a large company. 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 Waste Management, below.

NYSE:WM CEO Compensation, May 9th 2019

Is Waste Management, Inc. Growing?

On average over the last three years, Waste Management, Inc. has grown earnings per share (EPS) by 27% each year (using a line of best fit). In the last year, its revenue is up 3.7%.

This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. You might want to check this free visual report on analyst forecasts for future earnings.

Has Waste Management, Inc. Been A Good Investment?

I think that the total shareholder return of 82%, over three years, would leave most Waste Management, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Jim Fish is paid around the same as most CEOs of large companies.

Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. So one could argue the CEO compensation is quite modest, if you consider company performance! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Waste Management.

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.

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.