Yahoo Finance Our Take On CVS Health Corporation’s (NYSE:CVS) CEO Salary
In 2011 Larry Merlo was appointed CEO of CVS Health Corporation (NYSE:CVS). 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for CVS Health
How Does Larry Merlo’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that CVS Health Corporation has a market cap of US$104b, and is paying total annual CEO compensation of US$12m. (This is based on the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$1.6m. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO compensation was US$11m.
That means Larry Merlo 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 CVS Health, below.
Is CVS Health Corporation Growing?
CVS Health Corporation has reduced its earnings per share by an average of 1.2% a year, over the last three years. In the last year, its revenue is up 3.1%.
The lack of earnings per share growth in the last three years is unimpressive. The fairly low revenue growth fails to impress given that the earnings per share is down. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has CVS Health Corporation Been A Good Investment?
Given the total loss of 7.1% over three years, many shareholders in CVS Health Corporation are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
In Summary…
Larry Merlo is paid around the same as most CEOs of large companies.
After looking at EPS and total shareholder returns, it’s certainly hard to argue the company has performed well, since both metrics are down. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. So you may want to check if insiders are buying CVS Health shares with their own money (free access).
Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
