Yahoo Finance Here's What We Think About Watsco, Inc.'s (NYSE:WSO) CEO Pay
Albert Nahmad has been the CEO of Watsco, Inc. (NYSE:WSO) since 1972. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for Watsco
How Does Albert Nahmad's Compensation Compare With Similar Sized Companies?
According to our data, Watsco, Inc. has a market capitalization of US$6.2b, and paid its CEO total annual compensation worth US$7.1m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$658k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$6.4m.
That means Albert Nahmad receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at Watsco has changed from year to year.
Is Watsco, Inc. Growing?
Over the last three years Watsco, Inc. has grown its earnings per share (EPS) by an average of 10% per year (using a line of best fit). Its revenue is up 3.8% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. You might want to check this free visual report on analyst forecasts for future earnings.
Has Watsco, Inc. Been A Good Investment?
Watsco, Inc. has served shareholders reasonably well, with a total return of 27% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary...
Albert Nahmad is paid around the same as most CEOs of similar size companies.
We would wish for better returns (whether dividends or capital gains) but we do admire the solid EPS growth on show here. As a result of these considerations, I would suggest the CEO pay is reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Watsco shares (free trial).
If you want to buy a stock that is better than Watsco, this free list of high return, low debt companies is a great place to look.
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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