In 2014 Seifi Ghasemi was appointed CEO of Air Products and Chemicals, Inc. (NYSE:APD). First, this article will compare CEO compensation with compensation at other large companies. 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 process should give us an idea about how appropriately the CEO is paid.
How Does Seifi Ghasemi's Compensation Compare With Similar Sized Companies?
According to our data, Air Products and Chemicals, Inc. has a market capitalization of US$47b, and paid its CEO total annual compensation worth US$14m over the year to September 2018. While we always look at total compensation first, we note that the salary component is less, at US$1.3m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
So Seifi Ghasemi is paid around the average of 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.
The graphic below shows how CEO compensation at Air Products and Chemicals has changed from year to year.
Is Air Products and Chemicals, Inc. Growing?
Over the last three years Air Products and Chemicals, Inc. has grown its earnings per share (EPS) by an average of 17% per year (using a line of best fit). In the last year, its revenue is up 1.1%.
This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. You might want to check this free visual report on analyst forecasts for future earnings.
Has Air Products and Chemicals, Inc. Been A Good Investment?
I think that the total shareholder return of 71%, over three years, would leave most Air Products and Chemicals, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Seifi Ghasemi is paid around what is normal the leaders of larger companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. So one could argue the CEO compensation is quite modest, if you consider company performance! So you may want to check if insiders are buying Air Products and Chemicals shares with their own money (free access).
If you want to buy a stock that is better than Air Products and Chemicals, this free list of high return, low debt companies is a great place to look.
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