Jerry Colella has been the CEO of MKS Instruments, Inc. (NASDAQ:MKSI) since 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.
How Does Jerry Colella’s Compensation Compare With Similar Sized Companies?
According to our data, MKS Instruments, Inc. has a market capitalization of US$4.1b, and pays its CEO total annual compensation worth US$10m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$993k. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.2m.
As you can see, Jerry Colella is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean MKS Instruments, Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at MKS Instruments has changed from year to year.
Is MKS Instruments, Inc. Growing?
MKS Instruments, Inc. has increased its earnings per share (EPS) by an average of 34% a year, over the last three years (using a line of best fit). In the last year, its revenue is down -11%.
This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important.
Has MKS Instruments, Inc. Been A Good Investment?
Boasting a total shareholder return of 60% over three years, MKS Instruments, Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
We compared the total CEO remuneration paid by MKS Instruments, Inc., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong 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. Shareholders may want to check for free if MKS Instruments insiders are buying or selling shares.
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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