Yahoo Finance Is Watsco, Inc.'s (NYSE:WSO) CEO Pay Justified?
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Albert Nahmad became the CEO of Watsco, Inc. (NYSE:WSO) in 1972. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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.
See 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 pays its CEO total annual compensation worth US$7.1m. (This number is for the twelve months until December 2018). That's below the compensation, last year. While we always look at total compensation first, we note that the salary component is less, at US$658k. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$6.9m.
So Albert Nahmad is paid around the average of the companies we looked at. 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.
You can see, below, how CEO compensation at Watsco has changed over time.
Is Watsco, Inc. Growing?
Watsco, Inc. has increased its earnings per share (EPS) by an average of 11% a year, over the last three years (using a line of best fit). It achieved revenue growth of 3.5% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Shareholders might be interested in this free visualization of analyst forecasts.
Has Watsco, Inc. Been A Good Investment?
Boasting a total shareholder return of 35% over three years, Watsco, Inc. has done well by shareholders. 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...
Albert Nahmad is paid around the same as most CEOs of similar size companies.
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Watsco (free visualization of insider trades).
Important note: Watsco 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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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. Thank you for reading.
