Is Stericycle, Inc.’s (NASDAQ:SRCL) CEO Pay Justified?

In 2013 Charles Alutto was appointed CEO of Stericycle, Inc. (NASDAQ:SRCL). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Stericycle

How Does Charles Alutto’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Stericycle, Inc. has a market cap of US$3.4b, and is paying total annual CEO compensation of US$3.8m. (This is based on the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$1.0m. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO compensation of that group was US$5.1m.

That means Charles Alutto receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

The graphic below shows how CEO compensation at Stericycle has changed from year to year.

NasdaqGS:SRCL CEO Compensation January 8th 19
NasdaqGS:SRCL CEO Compensation January 8th 19

Is Stericycle, Inc. Growing?

Over the last three years Stericycle, Inc. has shrunk its earnings per share by an average of 53% per year. In the last year, its revenue is down -2.2%.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.

You might want to check this free visual report on analyst forecasts for future earnings.

Has Stericycle, Inc. Been A Good Investment?

Given the total loss of 68% over three years, many shareholders in Stericycle, Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

Charles Alutto is paid around what is normal the leaders of comparable size companies.

Returns have been disappointing and the company is not growing its earnings per share. Few would argue that it’s wise for the company to pay any more, before returns improve. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Stericycle (free visualization of insider trades).

Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.