In 2016 John Haley was appointed CEO of Willis Towers Watson Public Limited Company (NASDAQ:WLTW). 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. This process should give us an idea about how appropriately the CEO is paid.
How Does John Haley's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Willis Towers Watson Public Limited Company has a market cap of US$25b, and is paying total annual CEO compensation of US$5.0m. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued 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. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
This would give shareholders a good impression of the company, since most large companies pay more, leaving less for shareholders. Though positive, it's important we delve into the performance of the actual business.
The graphic below shows how CEO compensation at Willis Towers Watson has changed from year to year.
Is Willis Towers Watson Public Limited Company Growing?
Willis Towers Watson Public Limited Company has increased its earnings per share (EPS) by an average of 23% a year, over the last three years (using a line of best fit). Its revenue is up 4.6% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. 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 Willis Towers Watson Public Limited Company Been A Good Investment?
I think that the total shareholder return of 59%, over three years, would leave most Willis Towers Watson Public Limited Company shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Willis Towers Watson Public Limited Company is currently paying its CEO below what is normal for large companies. Many would consider this to indicate that the pay is modest since the business is growing. And given most shareholders are probably very happy with recent returns, you might even think that John Haley deserves a raise!
Most shareholders like to see a modestly paid CEO combined with strong performance by the company. It would be even more positive if company insiders are buying shares. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Willis Towers Watson.
Important note: Willis Towers Watson 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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