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In 2012 Juan Alaix was appointed CEO of Zoetis Inc. (NYSE:ZTS). 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. This process should give us an idea about how appropriately the CEO is paid.
How Does Juan Alaix’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Zoetis Inc. has a market cap of US$55b, and is paying total annual CEO compensation of US$12m. (This figure is for the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$1.2m. 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 Juan Alaix receives a similar amount to the median CEO pay, amongst 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 a visual representation of the CEO compensation at Zoetis, below.
Is Zoetis Inc. Growing?
On average over the last three years, Zoetis Inc. has grown earnings per share (EPS) by 32% each year (using a line of best fit). It achieved revenue growth of 8.7% 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 modest revenue growth, suggesting the underlying business is healthy.
Has Zoetis Inc. Been A Good Investment?
Most shareholders would probably be pleased with Zoetis Inc. for providing a total return of 141% over three years. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
Remuneration for Juan Alaix is close enough to the median pay for a CEO of a large company .
The company is growing earnings per share and total shareholder returns have been pleasing. So one could argue the CEO compensation is quite modest, if you consider company performance! So you may want to check if insiders are buying Zoetis shares with their own money (free access).
If you want to buy a stock that is better than Zoetis, 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 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.