Shareholders Will Most Likely Find Balchem Corporation's (NASDAQ:BCPC) CEO Compensation Acceptable

Key Insights

• Balchem's Annual General Meeting to take place on 20th of June
• CEO Ted Harris' total compensation includes salary of US$1.16m
• The total compensation is similar to the average for the industry
• Balchem's total shareholder return over the past three years was 18% while its EPS grew by 8.9% over the past three years

Under the guidance of CEO Ted Harris, Balchem Corporation (NASDAQ:BCPC) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 20th of June. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

View our latest analysis for Balchem

Comparing Balchem Corporation's CEO Compensation With The Industry

Our data indicates that Balchem Corporation has a market capitalization of US$4.9b, and total annual CEO compensation was reported as US$5.9m for the year to December 2023. We note that's a decrease of 51% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.2m.

On examining similar-sized companies in the American Chemicals industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$5.5m. This suggests that Balchem remunerates its CEO largely in line with the industry average. Moreover, Ted Harris also holds US$7.2m worth of Balchem stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$1.2m	US$1.1m	20%
Other	US$4.7m	US$11m	80%
Total Compensation	US$5.9m	US$12m	100%

Talking in terms of the industry, salary represented approximately 19% of total compensation out of all the companies we analyzed, while other remuneration made up 81% of the pie. Our data reveals that Balchem allocates salary more or less in line with the wider market. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Balchem Corporation's Growth

Balchem Corporation's earnings per share (EPS) grew 8.9% per year over the last three years. It saw its revenue drop 1.7% over the last year.

We generally like to see a little revenue growth, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Balchem Corporation Been A Good Investment?

Balchem Corporation has generated a total shareholder return of 18% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 1 warning sign for Balchem that investors should be aware of in a dynamic business environment.

Important note: Balchem is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com