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Is PolyOne Corporation's (NYSE:POL) CEO Pay Justified?

Simply Wall St

Bob Patterson became the CEO of PolyOne Corporation (NYSE:POL) in 2014. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for PolyOne

How Does Bob Patterson's Compensation Compare With Similar Sized Companies?

Our data indicates that PolyOne Corporation is worth US$2.5b, and total annual CEO compensation was reported as US$6.1m 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. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.1m.

That means Bob Patterson receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see, below, how CEO compensation at PolyOne has changed over time.

NYSE:POL CEO Compensation, September 27th 2019

Is PolyOne Corporation Growing?

Over the last three years PolyOne Corporation has grown its earnings per share (EPS) by an average of 4.2% per year (using a line of best fit). In the last year, its revenue is up 2.5%.

I would argue that the improvement in revenue isn't particularly impressive, but I'm happy with the modest EPS growth. Considering these factors I'd say performance has been pretty decent, though not amazing. It could be important to check this free visual depiction of what analysts expect for the future.

Has PolyOne Corporation Been A Good Investment?

PolyOne Corporation has generated a total shareholder return of 1.8% over three years, so most shareholders wouldn't be too disappointed. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Remuneration for Bob Patterson is close enough to the median pay for a CEO of a similar sized company .

The company isn't showing particularly great growth, and shareholder turns haven't been particularly inspiring in the last few years. But we don't think the CEO compensation is a problem. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling PolyOne (free visualization of insider trades).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

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. Thank you for reading.