In 2015 Leroy Ball was appointed CEO of Koppers Holdings Inc. (NYSE:KOP). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Leroy Ball's Compensation Compare With Similar Sized Companies?
According to our data, Koppers Holdings Inc. has a market capitalization of US$704m, and paid its CEO total annual compensation worth US$4.0m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$833k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from US$400m to US$1.6b, and the median CEO total compensation was US$2.5m.
Thus we can conclude that Leroy Ball receives more in total compensation than the median of a group of companies in the same market, and of similar size to Koppers Holdings Inc.. However, this doesn't necessarily mean the pay is too high. 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, below, how CEO compensation at Koppers Holdings has changed over time.
Is Koppers Holdings Inc. Growing?
Over the last three years Koppers Holdings Inc. has grown its earnings per share (EPS) by an average of 28% per year (using a line of best fit). In the last year, its revenue is up 9.3%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. You might want to check this free visual report on analyst forecasts for future earnings.
Has Koppers Holdings Inc. Been A Good Investment?
With a three year total loss of 20%, Koppers Holdings Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at Koppers Holdings Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. However, the returns to investors are far less impressive, over the same period. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. Shareholders may want to check for free if Koppers Holdings insiders are buying or selling shares.
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.
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.
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