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Paul Manning has been the CEO of Sensient Technologies Corporation (NYSE:SXT) since 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. 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 Paul Manning's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Sensient Technologies Corporation has a market cap of US$1.8b, and reported total annual CEO compensation of US$5.8m for the year to December 2019. That's a notable increase of 26% on last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$945k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO total compensation was US$4.7m.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Sensient Technologies stands. On a sector level, around 18% of total compensation represents salary and 82% is other remuneration. Sensient Technologies is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation
So Paul Manning receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance. You can see, below, how CEO compensation at Sensient Technologies has changed over time.
Is Sensient Technologies Corporation Growing?
Sensient Technologies Corporation has seen earnings per share (EPS) move positively by an average of 7.9% a year, over the last three years (using a line of best fit). Its revenue is down 4.6% over last year.
I would argue that the lack of revenue growth in the last year is less than ideal, but the improvement in EPS is good. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. You might want to check this free visual report on analyst forecasts for future earnings.
Has Sensient Technologies Corporation Been A Good Investment?
Since shareholders would have lost about 46% over three years, some Sensient Technologies Corporation shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
Paul Manning is paid around what is normal for the leaders of comparable size companies.
We would like to see somewhat stronger per share growth. And we think the shareholder returns - over three years - have been underwhelming. This contrasts with the growth in CEO remuneration. So many would argue that the CEO is certainly not underpaid. Shifting gears from CEO pay for a second, we've picked out 4 warning signs for Sensient Technologies that investors should be aware of in a dynamic business environment.
Important note: Sensient Technologies may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned.
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