In 2015 Mark Vergnano was appointed CEO of The Chemours Company (NYSE:CC). 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. This process should give us an idea about how appropriately the CEO is paid.
How Does Mark Vergnano's Compensation Compare With Similar Sized Companies?
Our data indicates that The Chemours Company is worth US$2.1b, and total annual CEO compensation is US$8.1m. (This figure is for the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$4.1m.
As you can see, Mark Vergnano is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean The Chemours Company is paying too much. 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 Chemours has changed from year to year.
Is The Chemours Company Growing?
On average over the last three years, The Chemours Company has grown earnings per share (EPS) by 68% each year (using a line of best fit). In the last year, its revenue is down -12%.
This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Shareholders might be interested in this free visualization of analyst forecasts.
Has The Chemours Company Been A Good Investment?
The Chemours Company has not done too badly by shareholders, with a total return of 8.9%, over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
We compared total CEO remuneration at The Chemours Company with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. Looking at the same time period, we think that the shareholder returns are respectable. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't call the CEO pay problematic. Whatever your view on compensation, you might want to check if insiders are buying or selling Chemours shares (free trial).
If you want to buy a stock that is better than Chemours, this free list of high return, low debt companies is a great place to look.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.