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Ted Doheny became the CEO of Sealed Air Corporation (NYSE:SEE) in 2018, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing Sealed Air Corporation's CEO Compensation With the industry
According to our data, Sealed Air Corporation has a market capitalization of US$6.9b, and paid its CEO total annual compensation worth US$9.0m over the year to December 2019. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.2m.
For comparison, other companies in the same industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$8.5m. So it looks like Sealed Air compensates Ted Doheny in line with the median for the industry. What's more, Ted Doheny holds US$15m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 13% of total compensation represents salary, while the remainder of 87% is other remuneration. There isn't a significant difference between Sealed Air and the broader market, in terms of salary allocation in the overall compensation package. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Sealed Air Corporation's Growth Numbers
Over the past three years, Sealed Air Corporation has seen its earnings per share (EPS) grow by 47% per year. In the last year, its revenue is up 2.3%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Sealed Air Corporation Been A Good Investment?
With a three year total loss of 3.9% for the shareholders, Sealed Air Corporation would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
As we touched on above, Sealed Air Corporation is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, the company has logged negative shareholder returns over the previous three years. However, EPS growth is positive over the same time frame. Overall, we wouldn't say Ted is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 2 warning signs for Sealed Air (1 is significant!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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