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Is AdvanSix Inc. (NYSE:ASIX) Excessively Paying Its CEO?

Simply Wall St

Erin Kane has been the CEO of AdvanSix Inc. (NYSE:ASIX) since 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for AdvanSix

How Does Erin Kane's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that AdvanSix Inc. has a market cap of US$605m, and reported total annual CEO compensation of US$3.3m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$659k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$2.6m.

So Erin Kane receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

You can see a visual representation of the CEO compensation at AdvanSix, below.

NYSE:ASIX CEO Compensation, November 16th 2019

Is AdvanSix Inc. Growing?

On average over the last three years, AdvanSix Inc. has grown earnings per share (EPS) by 13% each year (using a line of best fit). In the last year, its revenue is down 9.4%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Revenue growth is a real positive for growth, but ultimately profits are more important. It could be important to check this free visual depiction of what analysts expect for the future.

Has AdvanSix Inc. Been A Good Investment?

AdvanSix Inc. has generated a total shareholder return of 20% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Erin Kane is paid around the same as most CEOs of similar size companies.

The company is growing EPS but shareholder returns have been sound but not amazing. So upon reflection one could argue that the CEO pay is quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling AdvanSix shares (free trial).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

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.