In 2012 Juan Alaix was appointed CEO of Zoetis Inc. (NYSE:ZTS). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big 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 method should give us information to assess how appropriately the company pays the CEO.
How Does Juan Alaix’s Compensation Compare With Similar Sized Companies?
Our data indicates that Zoetis Inc. is worth US$46b, and total annual CEO compensation is US$11m. (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$1.2m. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO compensation was US$11m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
So Juan Alaix is paid around the average of 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?
Zoetis Inc. has increased its earnings per share (EPS) by an average of 36% a year, over the last three years (using a line of best fit). Its revenue is up 9.8% over 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. It could be important to check this free visual depiction of what analysts expect for the future.
Has Zoetis Inc. Been A Good Investment?
Boasting a total shareholder return of 143% over three years, Zoetis Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Juan Alaix is paid around what is normal the leaders of larger companies.
The company is growing earnings per share and total shareholder returns have been pleasing. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Zoetis.
Important note: Zoetis may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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