Key Insights
- West Pharmaceutical Services to hold its Annual General Meeting on 6th of May
- Total pay for CEO Eric Green includes US$1.17m salary
- Total compensation is similar to the industry average
- West Pharmaceutical Services' three-year loss to shareholders was 30% while its EPS was down 11% over the past three years
West Pharmaceutical Services, Inc. (NYSE:WST) has not performed well recently and CEO Eric Green will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 6th of May. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.
View our latest analysis for West Pharmaceutical Services
Comparing West Pharmaceutical Services, Inc.'s CEO Compensation With The Industry
According to our data, West Pharmaceutical Services, Inc. has a market capitalization of US$16b, and paid its CEO total annual compensation worth US$8.4m over the year to December 2024. That's a notable decrease of 11% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.2m.
For comparison, other companies in the American Life Sciences industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$12m. So it looks like West Pharmaceutical Services compensates Eric Green in line with the median for the industry. Moreover, Eric Green also holds US$37m worth of West Pharmaceutical Services stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2024 | 2023 | Proportion (2024) |
| Salary | US$1.2m | US$1.1m | 14% |
| Other | US$7.2m | US$8.3m | 86% |
| Total Compensation | US$8.4m | US$9.4m | 100% |
Talking in terms of the industry, salary represented approximately 13% of total compensation out of all the companies we analyzed, while other remuneration made up 87% of the pie. Our data reveals that West Pharmaceutical Services allocates salary more or less in line with the wider market. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at West Pharmaceutical Services, Inc.'s Growth Numbers
West Pharmaceutical Services, Inc. has reduced its earnings per share by 11% a year over the last three years. In the last year, its revenue is down 1.1%.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has West Pharmaceutical Services, Inc. Been A Good Investment?
With a three year total loss of 30% for the shareholders, West Pharmaceutical Services, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for West Pharmaceutical Services that you should be aware of before investing.
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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.