Luke Kissam has been the CEO of Albemarle Corporation (NYSE:ALB) since 2011. First, this article will compare CEO compensation with compensation at similar sized companies. 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 Luke Kissam's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Albemarle Corporation has a market cap of US$7.3b, and reported total annual CEO compensation of US$6.7m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$1.0m. 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$4.0b to US$12b, we found the median CEO total compensation was US$6.8m.
So Luke Kissam receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at Albemarle has changed from year to year.
Is Albemarle Corporation Growing?
Over the last three years Albemarle Corporation has grown its earnings per share (EPS) by an average of 13% per year (using a line of best fit). In the last year, its revenue is up 3.9%.
This demonstrates that the company has been improving recently. A good result. It's also good to see modest revenue growth, suggesting the underlying business is healthy. It could be important to check this free visual depiction of what analysts expect for the future.
Has Albemarle Corporation Been A Good Investment?
Given the total loss of 11% over three years, many shareholders in Albemarle Corporation are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
Luke Kissam is paid around what is normal the leaders of comparable size companies.
We think that the EPS growth is very pleasing, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Albemarle (free visualization of insider trades).
If you want to buy a stock that is better than Albemarle, this free list of high return, low debt companies is a great place to look.
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.