Yahoo Finance Here's Why We Think West Pharmaceutical Services, Inc.'s (NYSE:WST) CEO Compensation Looks Fair for the time being
Key Insights
West Pharmaceutical Services' Annual General Meeting to take place on 23rd of April
Salary of US$1.14m is part of CEO Eric Green's total remuneration
The total compensation is similar to the average for the industry
West Pharmaceutical Services' EPS grew by 20% over the past three years while total shareholder return over the past three years was 20%
CEO Eric Green has done a decent job of delivering relatively good performance at West Pharmaceutical Services, Inc. (NYSE:WST) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 23rd of April. Here is our take on why we think the CEO compensation looks appropriate.
Check out our latest analysis for West Pharmaceutical Services
Comparing West Pharmaceutical Services, Inc.'s CEO Compensation With The Industry
According to our data, West Pharmaceutical Services, Inc. has a market capitalization of US$28b, and paid its CEO total annual compensation worth US$9.4m over the year to December 2023. We note that's an increase of 19% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.
On comparing similar companies in the American Life Sciences industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$9.4m. From this we gather that Eric Green is paid around the median for CEOs in the industry. Furthermore, Eric Green directly owns US$58m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.1m | US$1.1m | 12% |
Other | US$8.3m | US$6.8m | 88% |
Total Compensation | US$9.4m | US$7.9m | 100% |
Talking in terms of the industry, salary represented approximately 14% of total compensation out of all the companies we analyzed, while other remuneration made up 86% of the pie. West Pharmaceutical Services sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at West Pharmaceutical Services, Inc.'s Growth Numbers
West Pharmaceutical Services, Inc. has seen its earnings per share (EPS) increase by 20% a year over the past three years. It achieved revenue growth of 2.2% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has West Pharmaceutical Services, Inc. Been A Good Investment?
West Pharmaceutical Services, Inc. has served shareholders reasonably well, with a total return of 20% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
To Conclude...
Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.
Whatever your view on compensation, you might want to check if insiders are buying or selling West Pharmaceutical Services shares (free trial).
Important note: West Pharmaceutical Services is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
