How Is Charles River Laboratories International's (NYSE:CRL) CEO Paid Relative To Peers?

James Foster has been the CEO of Charles River Laboratories International, Inc. (NYSE:CRL) since 1992, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Charles River Laboratories International

How Does Total Compensation For James Foster Compare With Other Companies In The Industry?

At the time of writing, our data shows that Charles River Laboratories International, Inc. has a market capitalization of US$11b, and reported total annual CEO compensation of US$18m for the year to December 2019. Notably, that's an increase of 23% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.3m.

In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$8.8m. This suggests that James Foster is paid more than the median for the industry. Furthermore, James Foster directly owns US$56m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 15% of total compensation out of all the companies we analyzed, while other remuneration made up 85% of the pie. Charles River Laboratories International sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Charles River Laboratories International, Inc.'s Growth Numbers

Over the past three years, Charles River Laboratories International, Inc. has seen its earnings per share (EPS) grow by 13% per year. Its revenue is up 12% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Charles River Laboratories International, Inc. Been A Good Investment?

We think that the total shareholder return of 101%, over three years, would leave most Charles River Laboratories International, Inc. shareholders smiling. 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.

In Summary...

As previously discussed, James is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. But EPS growth and shareholder returns have been top-notch for the past three years. As a result of the excellent all-round performance of the company, we believe CEO compensation is fair. The pleasing shareholder returns are the cherry on top. We wouldn't be wrong in saying that shareholders feel that James's performance creates value for the company.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Charles River Laboratories International that investors should think about before committing capital to this stock.

Important note: Charles River Laboratories International 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.

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. 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.

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