Tony Thene became the CEO of Carpenter Technology Corporation (NYSE:CRS) in 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Tony Thene’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Carpenter Technology Corporation has a market cap of US$1.9b, and is paying total annual CEO compensation of US$5.3m. (This number is for the twelve months until 2018). That’s less than last year. We think total compensation is more important but we note that the CEO salary is lower, at US$868k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.6m.
As you can see, Tony Thene is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Carpenter Technology Corporation is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Carpenter Technology has changed from year to year.
Is Carpenter Technology Corporation Growing?
Over the last three years Carpenter Technology Corporation has grown its earnings per share (EPS) by an average of 82% per year. It achieved revenue growth of 19% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Carpenter Technology Corporation Been A Good Investment?
Boasting a total shareholder return of 45% over three years, Carpenter Technology Corporation has done well by shareholders. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.
We compared the total CEO remuneration paid by Carpenter Technology Corporation, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. Shareholders may want to check for free if Carpenter Technology insiders are buying or selling shares.
Or you might rather take a peek at this analytical visualization of historic cash flow, earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.