Bill Wulfsohn has been the CEO of Ashland Global Holdings Inc. (NYSE:ASH) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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.
How Does Bill Wulfsohn's Compensation Compare With Similar Sized Companies?
Our data indicates that Ashland Global Holdings Inc. is worth US$4.5b, and total annual CEO compensation was reported as US$9.1m for the year to September 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.2m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.1m.
As you can see, Bill Wulfsohn is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Ashland Global Holdings Inc. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at Ashland Global Holdings, below.
Is Ashland Global Holdings Inc. Growing?
Over the last three years Ashland Global Holdings Inc. has grown its earnings per share (EPS) by an average of 87% per year (using a line of best fit). In the last year, its revenue is up 32%.
This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. It could be important to check this free visual depiction of what analysts expect for the future.
Has Ashland Global Holdings Inc. Been A Good Investment?
I think that the total shareholder return of 34%, over three years, would leave most Ashland Global Holdings Inc. shareholders smiling. 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.
We compared total CEO remuneration at Ashland Global Holdings Inc. with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within 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. As a result of this good performance, the CEO remuneration may well be quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Ashland Global Holdings shares (free trial).
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.
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