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How Should Investors Feel About Century Aluminum Company's (NASDAQ:CENX) CEO Pay?

Simply Wall St

Mike Bless has been the CEO of Century Aluminum Company (NASDAQ:CENX) since 2011. 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. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Century Aluminum

How Does Mike Bless's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Century Aluminum Company has a market cap of US$667m, and reported total annual CEO compensation of US$6.5m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$870k. 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$400m to US$1.6b, we found the median CEO total compensation was US$2.5m.

Thus we can conclude that Mike Bless receives more in total compensation than the median of a group of companies in the same market, and of similar size to Century Aluminum Company. 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.

The graphic below shows how CEO compensation at Century Aluminum has changed from year to year.

NasdaqGS:CENX CEO Compensation, January 10th 2020

Is Century Aluminum Company Growing?

Over the last three years Century Aluminum Company has grown its earnings per share (EPS) by an average of 35% per year (using a line of best fit). It achieved revenue growth of 2.6% over the last year.

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. Shareholders might be interested in this free visualization of analyst forecasts.

Has Century Aluminum Company Been A Good Investment?

Since shareholders would have lost about 32% over three years, some Century Aluminum Company shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared total CEO remuneration at Century Aluminum Company with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Shareholders may want to check for free if Century Aluminum 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 editorial-team@simplywallst.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.

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. Thank you for reading.