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In 2009 Marc Casper was appointed CEO of Thermo Fisher Scientific Inc. (NYSE:TMO). This analysis aims first to contrast CEO compensation with other large companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for Thermo Fisher Scientific
How Does Marc Casper's Compensation Compare With Similar Sized Companies?
Our data indicates that Thermo Fisher Scientific Inc. is worth US$108b, and total annual CEO compensation is US$19m. (This figure is for the year to December 2018). That's below the compensation, last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.5m. We looked at a group of companies with market capitalizations over US$8.0b and the 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.
It would therefore appear that Thermo Fisher Scientific Inc. pays Marc Casper 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. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Thermo Fisher Scientific has changed from year to year.
Is Thermo Fisher Scientific Inc. Growing?
Thermo Fisher Scientific Inc. has increased its earnings per share (EPS) by an average of 14% a year, over the last three years (using a line of best fit). It achieved revenue growth of 12% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. You might want to check this free visual report on analyst forecasts for future earnings.
Has Thermo Fisher Scientific Inc. Been A Good Investment?
I think that the total shareholder return of 76%, over three years, would leave most Thermo Fisher Scientific Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
We examined the amount Thermo Fisher Scientific Inc. pays its CEO, and compared it to the amount paid by other large companies. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. On top of that, in the same period, returns to shareholders have been great. As a result of this good performance, the CEO remuneration may well be quite reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Thermo Fisher Scientific (free visualization of insider trades).
If you want to buy a stock that is better than Thermo Fisher Scientific, this free list of high return, low debt companies is a great place to look.
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 editorial-team@simplywallst.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.