Key Insights

• Ecolab will host its Annual General Meeting on 2nd of May
• Salary of US$1.24m is part of CEO Christophe Beck's total remuneration
• The total compensation is similar to the average for the industry
• Ecolab's EPS grew by 13% over the past three years while total shareholder return over the past three years was 1.3%

Under the guidance of CEO Christophe Beck, Ecolab Inc. (NYSE:ECL) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 2nd of May. Here is our take on why we think the CEO compensation looks appropriate.

Check out our latest analysis for Ecolab

Comparing Ecolab Inc.'s CEO Compensation With The Industry

According to our data, Ecolab Inc. has a market capitalization of US$63b, and paid its CEO total annual compensation worth US$16m over the year to December 2023. We note that's an increase of 78% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.2m.

In comparison with other companies in the American Chemicals industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$14m. This suggests that Ecolab remunerates its CEO largely in line with the industry average. Furthermore, Christophe Beck directly owns US$14m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 19% of total compensation out of all the companies we analyzed, while other remuneration made up 81% of the pie. In Ecolab's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Ecolab Inc.'s Growth

Ecolab Inc.'s earnings per share (EPS) grew 13% per year over the last three years. Its revenue is up 8.0% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Ecolab Inc. Been A Good Investment?

With a total shareholder return of 1.3% over three years, Ecolab Inc. has done okay by shareholders, but there's always room for improvement. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Ecolab that investors should look into moving forward.

Important note: Ecolab is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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.