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In 2004 Doug Baker was appointed CEO of Ecolab Inc. (NYSE:ECL). 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Doug Baker's Compensation Compare With Similar Sized Companies?
According to our data, Ecolab Inc. has a market capitalization of US$58b, and pays its CEO total annual compensation worth US$14m. (This is based on the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$1.3m. 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 Doug Baker receives fairly typical remuneration for the CEO of a large company. 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.
You can see a visual representation of the CEO compensation at Ecolab, below.
Is Ecolab Inc. Growing?
Ecolab Inc. has increased its earnings per share (EPS) by an average of 16% a year, over the last three years (using a line of best fit). It achieved revenue growth of 3.9% over the last year.
This demonstrates that the company has been improving recently. A good result. 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 Ecolab Inc. Been A Good Investment?
I think that the total shareholder return of 71%, over three years, would leave most Ecolab Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Remuneration for Doug Baker is close enough to the median pay for a CEO of a large company .
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Indeed, many might consider the pay rather modest, given the solid company performance! So you may want to check if insiders are buying Ecolab shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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If you spot an error that warrants correction, please contact the editor at email@example.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.