Jim Scholhamer became the CEO of Ultra Clean Holdings, Inc. (NASDAQ:UCTT) in 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. 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 Jim Scholhamer's Compensation Compare With Similar Sized Companies?
According to our data, Ultra Clean Holdings, Inc. has a market capitalization of US$572m, and paid its CEO total annual compensation worth US$2.3m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$495k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$1.9m.
So Jim Scholhamer 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.
The graphic below shows how CEO compensation at Ultra Clean Holdings has changed from year to year.
Is Ultra Clean Holdings, Inc. Growing?
Over the last three years Ultra Clean Holdings, Inc. has grown its earnings per share (EPS) by an average of 25% per year (using a line of best fit). Its revenue is down 7.2% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. It could be important to check this free visual depiction of what analysts expect for the future.
Has Ultra Clean Holdings, Inc. Been A Good Investment?
I think that the total shareholder return of 86%, over three years, would leave most Ultra Clean Holdings, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Jim Scholhamer is paid around the same as most CEOs of similar size companies.
The company is growing earnings per share and total shareholder returns have been pleasing. So one could argue the CEO compensation is quite modest, if you consider company performance! So you may want to check if insiders are buying Ultra Clean Holdings shares with their own money (free access).
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Thank you for reading.