In 2015 Kim Mink was appointed CEO of Innophos Holdings, Inc. (NASDAQ:IPHS). 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. This process should give us an idea about how appropriately the CEO is paid.
How Does Kim Mink’s Compensation Compare With Similar Sized Companies?
Our data indicates that Innophos Holdings, Inc. is worth US$493m, and total annual CEO compensation is US$3.5m. (This number is for the twelve months until 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$788k. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO compensation was US$1.6m.
It would therefore appear that Innophos Holdings, Inc. pays Kim Mink more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Innophos Holdings has changed from year to year.
Is Innophos Holdings, Inc. Growing?
On average over the last three years, Innophos Holdings, Inc. has shrunk earnings per share by 12% each year. In the last year, its revenue is up 15%.
Sadly for shareholders, earnings per share are actually down, over three years. There’s no doubt that the silver lining is that revenue is up. But it isn’t sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.
You might want to check this free visual report on analyst forecasts for future earnings.
Has Innophos Holdings, Inc. Been A Good Investment?
With a total shareholder return of 22% over three years, Innophos Holdings, Inc. shareholders would, in general, be reasonably content. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We examined the amount Innophos Holdings, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
While shareholder returns are acceptable, they don’t delight. So you may want to delve deeper, because we don’t think the CEO pay is too low. Whatever your view on compensation, you might want to check if insiders are buying or selling Innophos Holdings shares (free trial).
Or you might rather take a peek at this analytical visualization of historic cash flow, earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.