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This article will reflect on the compensation paid to John Hayes who has served as CEO of Ball Corporation (NYSE:BLL) since 2011. This analysis will also assess whether Ball pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Ball Corporation's CEO Compensation With the industry
At the time of writing, our data shows that Ball Corporation has a market capitalization of US$27b, and reported total annual CEO compensation of US$12m for the year to December 2019. We note that's an increase of 8.4% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.3m.
In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$12m. From this we gather that John Hayes is paid around the median for CEOs in the industry. What's more, John Hayes holds US$48m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 13% of total compensation represents salary, while the remainder of 87% is other remuneration. Ball pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Ball Corporation's Growth
Ball Corporation has seen its earnings per share (EPS) increase by 16% a year over the past three years. Its revenue is down 2.5% over the previous year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Ball Corporation Been A Good Investment?
We think that the total shareholder return of 109%, over three years, would leave most Ball Corporation shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
As previously discussed, John is compensated close to the median for companies of its size, and which belong to the same industry. Investors would surely be happy to see that returns have been great, and that EPS is up. Indeed, many might consider that John is compensated rather modestly, given the solid company performance! Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Ball (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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