In 2016 John Fischer was appointed CEO of Olin Corporation (NYSE:OLN). 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 John Fischer’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Olin Corporation has a market cap of US$3.6b, and is paying total annual CEO compensation of US$7.8m. (This is based on the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$960k. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO compensation was US$4.9m.
It would therefore appear that Olin Corporation pays John Fischer more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Olin, below.
Is Olin Corporation Growing?
On average over the last three years, Olin Corporation has grown earnings per share (EPS) by 107% each year. Its revenue is up 15% over last year.
This demonstrates that the company has been improving recently. A good result. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has Olin Corporation Been A Good Investment?
With a total shareholder return of 10% over three years, Olin Corporation shareholders would, in general, be reasonably content. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We compared the total CEO remuneration paid by Olin Corporation, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. We also think investors are doing ok, over the same time period. While it may be worth researching further, we don’t see a problem with the CEO pay, given the good EPS growth. Whatever your view on compensation, you might want to check if insiders are buying or selling Olin shares (free trial).
Or you might rather take a peek at this analytical visualization of historic cash flow, earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.