Should You Worry About Waters Corporation’s (NYSE:WAT) CEO Pay Cheque?

In 2015 Chris O’Connell was appointed CEO of Waters Corporation (NYSE:WAT). First, this article will compare CEO compensation with compensation at other large companies. Then we’ll look at a snap shot of the business growth. 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 Waters

How Does Chris O’Connell’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Waters Corporation has a market cap of US$18b, and is paying total annual CEO compensation of US$7.6m. (This is based on the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at US$894k. 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.

That means Chris O’Connell receives fairly typical remuneration for the CEO of a large company. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

You can see a visual representation of the CEO compensation at Waters, below.

NYSE:WAT CEO Compensation, March 21st 2019
NYSE:WAT CEO Compensation, March 21st 2019

Is Waters Corporation Growing?

Over the last three years Waters Corporation has shrunk its earnings per share by an average of 31% per year (measured with a line of best fit). It achieved revenue growth of 4.8% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. The modest increase in revenue in the last year isn’t enough to make me overlook the disappointing change in earnings per share. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.

Has Waters Corporation Been A Good Investment?

Most shareholders would probably be pleased with Waters Corporation for providing a total return of 88% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

Chris O’Connell is paid around the same as most CEOs of large companies.

We feel that earnings per share have been a bit disappointing, but it’s nice to see positive shareholder returns over the last three years. So we doubt many are complaining about the fairly normal CEO pay. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Waters.

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 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.