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Is Carpenter Technology Corporation's (NYSE:CRS) CEO Overpaid Relative To Its Peers?

Simply Wall St

Tony Thene has been the CEO of Carpenter Technology Corporation (NYSE:CRS) since 2015. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Carpenter Technology

How Does Tony Thene's Compensation Compare With Similar Sized Companies?

According to our data, Carpenter Technology Corporation has a market capitalization of US$2.5b, and paid its CEO total annual compensation worth US$4.7m over the year to June 2019. That's below the compensation, last year. We think total compensation is more important but we note that the CEO salary is lower, at US$891k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO total compensation was US$5.1m.

So Tony Thene is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

The graphic below shows how CEO compensation at Carpenter Technology has changed from year to year.

NYSE:CRS CEO Compensation, October 17th 2019

Is Carpenter Technology Corporation Growing?

Carpenter Technology Corporation has increased its earnings per share (EPS) by an average of 67% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 10%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. 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?

Most shareholders would probably be pleased with Carpenter Technology Corporation for providing a total return of 40% over three years. 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...

Remuneration for Tony Thene is close enough to the median pay for a CEO of a similar sized company .

The company is growing earnings per share and total shareholder returns have been pleasing. So one could argue the CEO compensation is quite modest, if you consider company performance! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Carpenter Technology (free visualization of insider trades).

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.

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.