Should You Worry About Wolters Kluwer N.V.'s (AMS:WKL) CEO Pay Cheque?
Nancy McKinstry became the CEO of Wolters Kluwer N.V. (AMS:WKL) in 2003. This analysis aims first to contrast CEO compensation with 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 method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for Wolters Kluwer
How Does Nancy McKinstry's Compensation Compare With Similar Sized Companies?
Our data indicates that Wolters Kluwer N.V. is worth €17b, and total annual CEO compensation was reported as €8.1m for the year to December 2019. We note that's an increase of 71% above last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at €1.3m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations over €7.3b and the median CEO total compensation was €4.4m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On an industry level, roughly 34% of total compensation represents salary and 66% is other remuneration. Readers will want to know that Wolters Kluwer pays a modest slice of remuneration through salary, as compared to the wider sector.
It would therefore appear that Wolters Kluwer N.V. pays Nancy McKinstry 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 Wolters Kluwer, below.
Is Wolters Kluwer N.V. Growing?
On average over the last three years, Wolters Kluwer N.V. has seen earnings per share (EPS) move in a favourable direction by 9.1% each year (using a line of best fit). In the last year, its revenue is up 8.3%.
I would argue that the improvement in revenue isn't particularly impressive, but I'm happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. Shareholders might be interested in this free visualization of analyst forecasts.
Has Wolters Kluwer N.V. Been A Good Investment?
Boasting a total shareholder return of 72% over three years, Wolters Kluwer N.V. 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...
We examined the amount Wolters Kluwer N.V. pays its CEO, and compared it to the amount paid by other large companies. As discussed above, we discovered that the company pays more than the median of that group.
Over the last three years returns to investors have been great, though we might have liked stronger business growth. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. Looking into other areas, we've picked out 1 warning sign for Wolters Kluwer that investors should think about before committing capital to this stock.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
