Is Air Products and Chemicals, Inc.'s (NYSE:APD) CEO Pay Justified?

In 2014 Seifi Ghasemi was appointed CEO of Air Products and Chemicals, Inc. (NYSE:APD). This analysis aims first to contrast CEO compensation with other large companies. Next, we'll consider growth that the business demonstrates. 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.

Check out our latest analysis for Air Products and Chemicals

How Does Seifi Ghasemi's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Air Products and Chemicals, Inc. has a market cap of US$49b, and is paying total annual CEO compensation of US$14m. (This number is for the twelve months until September 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$1.3m. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

So Seifi Ghasemi 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, below, how CEO compensation at Air Products and Chemicals has changed over time.

Is Air Products and Chemicals, Inc. Growing?

On average over the last three years, Air Products and Chemicals, Inc. has grown earnings per share (EPS) by 17% each year (using a line of best fit). In the last year, its revenue is up 1.1%.

This demonstrates that the company has been improving recently. A good result. It's nice to see a little revenue growth, as this is consistent with healthy business conditions.

Has Air Products and Chemicals, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Air Products and Chemicals, Inc. for providing a total return of 67% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Seifi Ghasemi is paid around the same as most CEOs of large companies.

Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. So one could argue the CEO compensation is quite modest, if you consider company performance! Whatever your view on compensation, you might want to check if insiders are buying or selling Air Products and Chemicals shares (free trial).

If you want to buy a stock that is better than Air Products and Chemicals, 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.