Stock Analysis

We Think Shareholders Will Probably Be Generous With West Pharmaceutical Services, Inc.'s (NYSE:WST) CEO Compensation

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We have been pretty impressed with the performance at West Pharmaceutical Services, Inc. (NYSE:WST) recently and CEO Eric Green deserves a mention for their role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 04 May 2021. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

Check out our latest analysis for West Pharmaceutical Services

How Does Total Compensation For Eric Green Compare With Other Companies In The Industry?

At the time of writing, our data shows that West Pharmaceutical Services, Inc. has a market capitalization of US$24b, and reported total annual CEO compensation of US$7.6m for the year to December 2020. Notably, that's an increase of 17% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$989k.

On comparing similar companies in the industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$10m. From this we gather that Eric Green is paid around the median for CEOs in the industry. Furthermore, Eric Green directly owns US$30m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary US$989k US$936k 13%
Other US$6.7m US$5.6m 87%
Total CompensationUS$7.6m US$6.5m100%

Speaking on an industry level, nearly 19% of total compensation represents salary, while the remainder of 81% is other remuneration. West Pharmaceutical Services sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

NYSE:WST CEO Compensation April 29th 2021

A Look at West Pharmaceutical Services, Inc.'s Growth Numbers

West Pharmaceutical Services, Inc.'s earnings per share (EPS) grew 32% per year over the last three years. Its revenue is up 17% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has West Pharmaceutical Services, Inc. Been A Good Investment?

Boasting a total shareholder return of 281% over three years, West Pharmaceutical Services, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling West Pharmaceutical Services (free visualization of insider trades).

Important note: West Pharmaceutical Services is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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