Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Doug Baker has been the CEO of Ecolab Inc. (NYSE:ECL) since 2004. This analysis aims first to contrast CEO compensation with other large companies. 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does Doug Baker’s Compensation Compare With Similar Sized Companies?
Our data indicates that Ecolab Inc. is worth US$55b, and total annual CEO compensation is US$14m. (This figure is for the year to December 2018). That’s actually a decrease on the year before. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.3m. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
So Doug Baker is paid around the average of the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at Ecolab has changed over time.
Is Ecolab Inc. Growing?
Over the last three years Ecolab Inc. has grown its earnings per share (EPS) by an average of 16% per year (using a line of best fit). Its revenue is up 3.9% over last year.
This demonstrates that the company has been improving recently. A good result. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.
Has Ecolab Inc. Been A Good Investment?
Boasting a total shareholder return of 65% over three years, Ecolab 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.
Doug Baker is paid around the same as most CEOs of large companies.
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Indeed, many might consider the pay rather modest, given the solid company performance! So you may want to check if insiders are buying Ecolab shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.