Dan Glaser became the CEO of Marsh & McLennan Companies, Inc. (NYSE:MMC) in 2013. This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. 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 Dan Glaser’s Compensation Compare With Similar Sized Companies?
According to our data, Marsh & McLennan Companies, Inc. has a market capitalization of US$48b, and pays its CEO total annual compensation worth US$17m. (This figure is for the year to December 2018). That’s just a smallish increase of 1.6% on last year. We think total compensation is more important but we note that the CEO salary is lower, at US$1.5m. When we examined a group of companies with market caps over US$8.0b, we found that their 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 Marsh & McLennan Companies, Inc. pays Dan Glaser 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 better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Marsh & McLennan Companies, below.
Is Marsh & McLennan Companies, Inc. Growing?
Earnings per share at Marsh & McLennan Companies, Inc. are much the same as they were three years ago, albeit with a positive trend. In the last year, its revenue is up 6.6%.
I’m not particularly impressed by the revenue growth, but the modest improvement in EPS is good. It’s clear the performance has been quite decent, but it it falls short of outstanding,based on this information. You might want to check this free visual report on analyst forecasts for future earnings.
Has Marsh & McLennan Companies, Inc. Been A Good Investment?
Boasting a total shareholder return of 59% over three years, Marsh & McLennan Companies, 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.
We compared total CEO remuneration at Marsh & McLennan Companies, Inc. with the amount paid at other large companies. Our data suggests that it pays above the median CEO pay within that group.
While we generally prefer to see stronger EPS growth, there’s no arguing with the strong returns to shareholders, over the last three years. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. Shareholders may want to check for free if Marsh & McLennan Companies insiders are buying or selling shares.
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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