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How Much Did LyondellBasell Industries' (NYSE:LYB) CEO Pocket Last Year?

Simply Wall St

Bob Patel became the CEO of LyondellBasell Industries N.V. (NYSE:LYB) in 2015, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for LyondellBasell Industries

How Does Total Compensation For Bob Patel Compare With Other Companies In The Industry?

According to our data, LyondellBasell Industries N.V. has a market capitalization of US$23b, and paid its CEO total annual compensation worth US$16m over the year to December 2019. We note that's a decrease of 12% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.6m.

For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$15m. So it looks like LyondellBasell Industries compensates Bob Patel in line with the median for the industry. What's more, Bob Patel holds US$19m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2019

2018

Proportion (2019)

Salary

US$1.6m

US$1.6m

10%

Other

US$14m

US$17m

90%

Total Compensation

US$16m

US$18m

100%

On an industry level, roughly 19% of total compensation represents salary and 81% is other remuneration. It's interesting to note that LyondellBasell Industries allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

A Look at LyondellBasell Industries N.V.'s Growth Numbers

Over the last three years, LyondellBasell Industries N.V. has shrunk its earnings per share by 3.5% per year. In the last year, its revenue is down 12%.

The decline in earnings is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has LyondellBasell Industries N.V. Been A Good Investment?

With a three year total loss of 12% for the shareholders, LyondellBasell Industries N.V. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we noted earlier, LyondellBasell Industries pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, earnings growth and shareholder returns have been in the red for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 3 warning signs for LyondellBasell Industries that investors should be aware of in a dynamic business environment.

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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.