Should You Worry About Marsh & McLennan Companies, Inc.'s (NYSE:MMC) CEO Salary Level?
Dan Glaser has been the CEO of Marsh & McLennan Companies, Inc. (NYSE:MMC) since 2013. First, this article will compare CEO compensation with compensation at other large companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Marsh & McLennan Companies
How Does Dan Glaser's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Marsh & McLennan Companies, Inc. has a market cap of US$57b, and reported total annual CEO compensation of US$17m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$1.5m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations over US$8.0b and the 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.
It would therefore appear that Marsh & McLennan Companies, Inc. pays Dan Glaser more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Marsh & McLennan Companies, below.
Is Marsh & McLennan Companies, Inc. Growing?
Marsh & McLennan Companies, Inc. has reduced its earnings per share by an average of 4.3% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 11%.
Few shareholders would be pleased to read that earnings per share are lower over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Marsh & McLennan Companies, Inc. Been A Good Investment?
I think that the total shareholder return of 63%, over three years, would leave most Marsh & McLennan Companies, 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...
We compared the total CEO remuneration paid by Marsh & McLennan Companies, Inc., and compared it to remuneration at a group of other large companies. We found that it pays well over the median amount paid in the benchmark group.
We think many shareholders would be underwhelmed with the business growth over the last three years. On the other hand, returns have been good, so the company is doing something right. Considering this, shareholders are probably not too worried about the CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Marsh & McLennan Companies (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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