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In 2015 Ted Harris was appointed CEO of Balchem Corporation (NASDAQ:BCPC). First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. 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.
How Does Ted Harris’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Balchem Corporation has a market cap of US$3.2b, and is paying total annual CEO compensation of US$3.3m. (This figure is for the year to December 2018). We note that’s an increase of 45% above last year. We think total compensation is more important but we note that the CEO salary is lower, at US$800k. 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$5.2m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at Balchem has changed from year to year.
Is Balchem Corporation Growing?
On average over the last three years, Balchem Corporation has grown earnings per share (EPS) by 19% each year (using a line of best fit). In the last year, its revenue is up 3.4%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. It could be important to check this free visual depiction of what analysts expect for the future.
Has Balchem Corporation Been A Good Investment?
Most shareholders would probably be pleased with Balchem Corporation for providing a total return of 63% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Balchem Corporation is currently paying its CEO below what is normal for companies of its size. Since the business is growing, many would argue this suggests the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Ted Harris deserves a raise!
It is relatively rare to see a modestly paid CEO when performance is so impressive. It would be even more positive if company insiders are buying shares. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Balchem.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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 firstname.lastname@example.org. 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.