How Much Is Agilent Technologies, Inc. (NYSE:A) Paying Its CEO?

Mike McMullen became the CEO of Agilent Technologies, Inc. (NYSE:A) in 2015, 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 assess whether Agilent Technologies pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Agilent Technologies

Comparing Agilent Technologies, Inc.'s CEO Compensation With the industry

Our data indicates that Agilent Technologies, Inc. has a market capitalization of US$27b, and total annual CEO compensation was reported as US$13m for the year to October 2019. That's just a smallish increase of 6.9% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.2m.

On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$8.8m. Accordingly, our analysis reveals that Agilent Technologies, Inc. pays Mike McMullen north of the industry median. What's more, Mike McMullen holds US$31m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 15% of total compensation out of all the companies we analyzed, while other remuneration made up 85% of the pie. It's interesting to note that Agilent Technologies allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Agilent Technologies, Inc.'s Growth Numbers

Over the past three years, Agilent Technologies, Inc. has seen its earnings per share (EPS) grow by 7.0% per year. It achieved revenue growth of 4.3% over the last year.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. 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 Agilent Technologies, Inc. Been A Good Investment?

Boasting a total shareholder return of 52% over three years, Agilent Technologies, Inc. has done well by shareholders. 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.

To Conclude...

As we noted earlier, Agilent Technologies pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Importantly though, shareholder returns for the last three years have been excellent. That's why we were hoping earnings growth would match this growth, but sadly that is not the case. We'd ideally want to see higher earnings growth, but CEO compensation seems to be within reason, given high shareholder returns.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for Agilent Technologies that you should be aware of before investing.

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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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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