Albert Chao has been the CEO of Westlake Chemical Corporation (NYSE:WLK) since 2004. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
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How Does Albert Chao's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Westlake Chemical Corporation has a market cap of US$8.0b, and is paying total annual CEO compensation of US$9.0m. (This number is for the twelve months until December 2018). That's a fairly small increase of 5.9% on year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.1m. We looked at a group of companies with market capitalizations from US$4.0b to US$12b, and the median CEO total compensation was US$6.9m.
As you can see, Albert Chao is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Westlake Chemical Corporation is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at Westlake Chemical, below.
Is Westlake Chemical Corporation Growing?
Over the last three years Westlake Chemical Corporation has grown its earnings per share (EPS) by an average of 38% per year (using a line of best fit). It achieved revenue growth of 3.2% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Shareholders might be interested in this free visualization of analyst forecasts.
Has Westlake Chemical Corporation Been A Good Investment?
I think that the total shareholder return of 49%, over three years, would leave most Westlake Chemical Corporation shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
We compared the total CEO remuneration paid by Westlake Chemical Corporation, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Westlake Chemical.
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.
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