What We Learnt About Charles River Laboratories International’s (NYSE:CRL) CEO Compensation

This article will reflect on the compensation paid to James Foster who has served as CEO of Charles River Laboratories International, Inc. (NYSE:CRL) since 1992. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Charles River Laboratories International.

See our latest analysis for Charles River Laboratories International

Comparing Charles River Laboratories International, Inc.’s CEO Compensation With the industry

According to our data, Charles River Laboratories International, Inc. has a market capitalization of US$8.6b, and paid its CEO total annual compensation worth US$18m over the year to December 2019. That’s a notable increase of 23% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.3m.

For comparison, other companies in the same industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$6.0m. Hence, we can conclude that James Foster is remunerated higher than the industry median. Furthermore, James Foster directly owns US$48m worth of shares in the company, implying that they are deeply invested in the company’s success.

Component20192018Proportion (2019)
Salary US$1.3m US$1.2m 7%
Other US$16m US$13m 93%
Total CompensationUS$18m US$14m100%

On a industry level, around 15% of total compensation represents salary and 85% is other remuneration. In Charles River Laboratories International’s case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader 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:CRL CEO Compensation July 1st 2020
NYSE:CRL CEO Compensation July 1st 2020

A Look at Charles River Laboratories International, Inc.’s Growth Numbers

Over the past three years, Charles River Laboratories International, Inc. has seen its earnings per share (EPS) grow by 13% per year. In the last year, its revenue is up 15%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company’s future earnings..

Has Charles River Laboratories International, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Charles River Laboratories International, Inc. for providing a total return of 72% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude…

As we noted earlier, Charles River Laboratories International pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But earnings growth and shareholder returns have been top-notch for the past three years. Considering such exceptional results for the company, we’d venture to say CEO compensation is fair. And given most shareholders are probably very happy with recent returns, they might even think that James deserves a raise!

CEO compensation can have a massive impact on performance, but it’s just one element. We’ve identified 3 warning signs for Charles River Laboratories International that investors should be aware of in a dynamic business environment.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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