Is Quaker Chemical Corporation (NYSE:KWR) Excessively Paying Its CEO?

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Mike Barry has been the CEO of Quaker Chemical Corporation (NYSE:KWR) since 2008. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Quaker Chemical

How Does Mike Barry’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Quaker Chemical Corporation has a market cap of US$2.6b, and is paying total annual CEO compensation of US$4.8m. (This number is for the twelve months until December 2018). While we always look at total compensation first, we note that the salary component is less, at US$845k. 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$5.2m.

So Mike Barry is paid around the average of 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, below, how CEO compensation at Quaker Chemical has changed over time.

NYSE:KWR CEO Compensation, July 4th 2019
NYSE:KWR CEO Compensation, July 4th 2019

Is Quaker Chemical Corporation Growing?

Over the last three years Quaker Chemical Corporation has shrunk its earnings per share by an average of 7.5% per year (measured with a line of best fit). Its revenue is up 3.5% over last year.

Sadly for shareholders, earnings per share are actually down, over three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.

Has Quaker Chemical Corporation Been A Good Investment?

Boasting a total shareholder return of 135% over three years, Quaker Chemical Corporation has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

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

We’re not seeing great strides in earnings per share, but the company has clearly pleased some investors, given the returns over the last three years. So we can’t see a reason to suggest the pay is inappropriate. So you may want to check if insiders are buying Quaker Chemical shares with their own money (free access).

If you want to buy a stock that is better than Quaker Chemical, this free list of high return, low debt companies is a great place to look.

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.