Cabot Corporation's (NYSE:CBT) CEO Will Probably Have Their Compensation Approved By Shareholders

Key Insights

• Cabot's Annual General Meeting to take place on 7th of March
• CEO Sean Keohane's total compensation includes salary of US$1.08m
• The total compensation is similar to the average for the industry
• Cabot's EPS grew by 84% over the past three years while total shareholder return over the past three years was 86%

The performance at Cabot Corporation (NYSE:CBT) has been quite strong recently and CEO Sean Keohane has played a role in it. Coming up to the next AGM on 7th of March, shareholders would be keeping this in mind. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

Check out our latest analysis for Cabot

How Does Total Compensation For Sean Keohane Compare With Other Companies In The Industry?

Our data indicates that Cabot Corporation has a market capitalization of US$4.6b, and total annual CEO compensation was reported as US$7.8m for the year to September 2023. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.1m.

On examining similar-sized companies in the American Chemicals industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$7.4m. So it looks like Cabot compensates Sean Keohane in line with the median for the industry. Furthermore, Sean Keohane directly owns US$21m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$1.1m	US$1.0m	14%
Other	US$6.7m	US$6.9m	86%
Total Compensation	US$7.8m	US$7.9m	100%

On an industry level, roughly 18% of total compensation represents salary and 82% is other remuneration. Cabot sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Cabot Corporation's Growth Numbers

Cabot Corporation's earnings per share (EPS) grew 84% per year over the last three years. It saw its revenue drop 9.1% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Cabot Corporation Been A Good Investment?

Most shareholders would probably be pleased with Cabot Corporation for providing a total return of 86% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Cabot that you should be aware of before investing.

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.