In 2008 Rob Friel was appointed CEO of PerkinElmer, Inc. (NYSE:PKI). First, this article will compare CEO compensation with compensation at other large companies. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Rob Friel’s Compensation Compare With Similar Sized Companies?
According to our data, PerkinElmer, Inc. has a market capitalization of US$9.7b, and paid its CEO total annual compensation worth US$14m over the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.1m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. 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. Once you start looking at very large companies, you need to take a broader range, because there simply aren’t that many of them.
So Rob Friel receives a similar amount to the median CEO pay, amongst the companies we looked at. 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 PerkinElmer has changed from year to year.
Is PerkinElmer, Inc. Growing?
On average over the last three years, PerkinElmer, Inc. has grown earnings per share (EPS) by 3.3% each year (using a line of best fit). In the last year, its revenue is up 6.5%.
I’d prefer higher revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. It could be important to check this free visual depiction of what analysts expect for the future.
Has PerkinElmer, Inc. Been A Good Investment?
Most shareholders would probably be pleased with PerkinElmer, Inc. for providing a total return of 72% over three years. 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.
Rob Friel is paid around what is normal the leaders of larger companies.
While the growth could be better, the shareholder returns are clearly good. So considering most shareholders would be happy, we’d say the CEO pay is appropriate. Shareholders may want to check for free if PerkinElmer insiders are buying or selling shares.
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 email@example.com. 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.