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In 2014 Paul Manning was appointed CEO of Sensient Technologies Corporation (NYSE:SXT). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Paul Manning's Compensation Compare With Similar Sized Companies?
Our data indicates that Sensient Technologies Corporation is worth US$3.1b, and total annual CEO compensation is US$4.6m. (This is based on the year to December 2018). That's below the compensation, last year. While we always look at total compensation first, we note that the salary component is less, at US$945k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$5.1m.
So Paul Manning receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Sensient Technologies has changed from year to year.
Is Sensient Technologies Corporation Growing?
On average over the last three years, Sensient Technologies Corporation has grown earnings per share (EPS) by 14% each year (using a line of best fit). In the last year, its revenue changed by just 0.04%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings.
Has Sensient Technologies Corporation Been A Good Investment?
With a total shareholder return of 13% over three years, Sensient Technologies Corporation shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
Remuneration for Paul Manning is close enough to the median pay for a CEO of a similar sized company .
The company is growing EPS but shareholder returns have been sound but not amazing. As a result of these considerations, I would suggest the CEO pay is reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Sensient Technologies shares (free trial).
Important note: Sensient Technologies may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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If you spot an error that warrants correction, please contact the editor at email@example.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.