In 2008 Mike Barry was appointed CEO of Quaker Chemical Corporation (NYSE:KWR). 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. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Mike Barry’s Compensation Compare With Similar Sized Companies?
According to our data, Quaker Chemical Corporation has a market capitalization of US$3.2b, and paid its CEO total annual compensation worth US$4.8m over the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$845k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$4.9m.
So Mike Barry receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see a visual representation of the CEO compensation at Quaker Chemical, below.
Is Quaker Chemical Corporation Growing?
Quaker Chemical Corporation has reduced its earnings per share by an average of 8.6% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 10.0%.
Unfortunately, earnings per share have trended lower over the last three years. The fairly low revenue growth fails to impress given that the earnings per share is down. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Quaker Chemical Corporation Been A Good Investment?
I think that the total shareholder return of 41%, over three years, would leave most Quaker Chemical Corporation shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Mike Barry is paid around the same as most CEOs of similar size companies.
We feel that earnings per share have been a bit disappointing, but it’s nice to see positive shareholder returns over the last three years. So we can’t see a reason to suggest the pay is inappropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Quaker Chemical (free visualization of insider trades).
Important note: Quaker Chemical 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.
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.
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