Marc Casper has been the CEO of Thermo Fisher Scientific Inc. (NYSE:TMO) since 2009. 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. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Marc Casper's Compensation Compare With Similar Sized Companies?
According to our data, Thermo Fisher Scientific Inc. has a market capitalization of US$109b, and paid its CEO total annual compensation worth US$19m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$1.5m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations over US$8.0b and the 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.
It would therefore appear that Thermo Fisher Scientific Inc. pays Marc Casper more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Thermo Fisher Scientific has changed over time.
Is Thermo Fisher Scientific Inc. Growing?
Over the last three years Thermo Fisher Scientific Inc. has grown its earnings per share (EPS) by an average of 17% per year (using a line of best fit). In the last year, its revenue is up 7.7%.
This demonstrates that the company has been improving recently. A good result. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Shareholders might be interested in this free visualization of analyst forecasts.
Has Thermo Fisher Scientific Inc. Been A Good Investment?
I think that the total shareholder return of 78%, over three years, would leave most Thermo Fisher Scientific Inc. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
We examined the amount Thermo Fisher Scientific Inc. pays its CEO, and compared it to the amount paid by other large companies. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling Thermo Fisher Scientific shares (free trial).
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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