Darius Adamczyk has been the CEO of Honeywell International Inc. (NYSE:HON) since 2017. First, this article will compare CEO compensation with compensation at other large companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Darius Adamczyk's Compensation Compare With Similar Sized Companies?
Our data indicates that Honeywell International Inc. is worth US$125b, and total annual CEO compensation was reported as US$19m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.6m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. 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. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
It would therefore appear that Honeywell International Inc. pays Darius Adamczyk 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 better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Honeywell International, below.
Is Honeywell International Inc. Growing?
Honeywell International Inc. has increased its earnings per share (EPS) by an average of 15% a year, over the last three years (using a line of best fit). Its revenue is down 14% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. Shareholders might be interested in this free visualization of analyst forecasts.
Has Honeywell International Inc. Been A Good Investment?
Boasting a total shareholder return of 65% over three years, Honeywell International Inc. has done well by shareholders. 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.
We compared total CEO remuneration at Honeywell International Inc. with the amount paid at other large companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Honeywell International.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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