In 2015 Ted Harris was appointed CEO of Balchem Corporation (NASDAQ:BCPC). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Ted Harris’s Compensation Compare With Similar Sized Companies?
According to our data, Balchem Corporation has a market capitalization of US$2.8b, and pays its CEO total annual compensation worth US$2.3m. (This number is for the twelve months until 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$700k. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO compensation of that group was US$5.0m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see a visual representation of the CEO compensation at Balchem, below.
Is Balchem Corporation Growing?
Balchem Corporation has increased its earnings per share (EPS) by an average of 20% a year, over the last three years It achieved revenue growth of 11% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. IThis sort of respectable year-on-year revenue growth is often seen at a healthy, growing business.
You might want to check this free visual report on analyst forecasts for future earnings.
Has Balchem Corporation Been A Good Investment?
Balchem Corporation has served shareholders reasonably well, with a total return of 28% over three years. 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.
Balchem Corporation is currently paying its CEO below what is normal for companies of its size. Many would consider this to indicate that the pay is modest since the business is growing. The total shareholder return might not be amazing, but that doesn’t mean that Ted Harris is paid too much.
It’s good to see reasonable payment of the CEO, even while the business improves. But for me, it’s even better if insiders are also buying shares with their own cold, hard, cash. So you may want to check if insiders are buying Balchem shares with their own money (free access).
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
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 firstname.lastname@example.org.