It's Unlikely That Elementis plc's (LON:ELM) CEO Will See A Huge Pay Rise This Year

Key Insights

• Elementis to hold its Annual General Meeting on 30th of April
• Salary of US$1.02m is part of CEO Paul Waterman's total remuneration
• Total compensation is 159% above industry average
• Over the past three years, Elementis' EPS grew by 4.6% and over the past three years, the total loss to shareholders 8.0%

As many shareholders of Elementis plc (LON:ELM) will be aware, they have not made a gain on their investment in the past three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 30th of April. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for Elementis

How Does Total Compensation For Paul Waterman Compare With Other Companies In The Industry?

At the time of writing, our data shows that Elementis plc has a market capitalization of UK£809m, and reported total annual CEO compensation of US$3.5m for the year to December 2023. That's a notable increase of 31% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.0m.

In comparison with other companies in the British Chemicals industry with market capitalizations ranging from UK£321m to UK£1.3b, the reported median CEO total compensation was US$1.4m. This suggests that Paul Waterman is paid more than the median for the industry. Furthermore, Paul Waterman directly owns UK£2.6m worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	US$1.0m	US$941k	29%
Other	US$2.5m	US$1.7m	71%
Total Compensation	US$3.5m	US$2.7m	100%

Speaking on an industry level, nearly 74% of total compensation represents salary, while the remainder of 26% is other remuneration. Elementis pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Elementis plc's Growth

Over the past three years, Elementis plc has seen its earnings per share (EPS) grow by 4.6% per year. It saw its revenue drop 3.1% over the last year.

We would prefer it if there was revenue growth, but the modest improvement in EPS is good. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Elementis plc Been A Good Investment?

With a three year total loss of 8.0% for the shareholders, Elementis plc would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for Elementis that investors should be aware of in a dynamic business environment.

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

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.