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Greg Poling became the CEO of GCP Applied Technologies Inc. (NYSE:GCP) in 2016. 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 process should give us an idea about how appropriately the CEO is paid.
How Does Greg Poling’s Compensation Compare With Similar Sized Companies?
According to our data, GCP Applied Technologies Inc. has a market capitalization of US$1.8b, and pays its CEO total annual compensation worth US$5.3m. (This figure is for the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$800k. 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$3.5m.
Thus we can conclude that Greg Poling receives more in total compensation than the median of a group of companies in the same market, and of similar size to GCP Applied Technologies Inc.. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at GCP Applied Technologies has changed from year to year.
Is GCP Applied Technologies Inc. Growing?
Over the last three years GCP Applied Technologies Inc. has shrunk its earnings per share by an average of 119% per year (measured with a line of best fit). It achieved revenue growth of 7.8% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. The fairly low revenue growth fails to impress given that the earnings per share is down. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has GCP Applied Technologies Inc. Been A Good Investment?
Boasting a total shareholder return of 60% over three years, GCP Applied Technologies Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount GCP Applied Technologies Inc. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
On the other hand, returns have been good, so the company is doing something right. So on this analysis we’d stop short of criticizing the level of CEO compensation. So you may want to check if insiders are buying GCP Applied Technologies shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.