Shareholders May Find It Hard To Justify A Pay Rise For Element Solutions Inc's (NYSE:ESI) CEO This Year

Key Insights

• Element Solutions will host its Annual General Meeting on 3rd of June
• CEO Ben Gliklich's total compensation includes salary of US$1.04m
• The total compensation is similar to the average for the industry
• Over the past three years, Element Solutions' EPS grew by 18% and over the past three years, the total shareholder return was 4.6%

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Under the guidance of CEO Ben Gliklich, Element Solutions Inc (NYSE:ESI) 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 3rd of June. Here is our take on why we think the CEO compensation looks appropriate.

Check out our latest analysis for Element Solutions

Comparing Element Solutions Inc's CEO Compensation With The Industry

At the time of writing, our data shows that Element Solutions Inc has a market capitalization of US$5.2b, and reported total annual CEO compensation of US$6.9m for the year to December 2024. That's a notable increase of 45% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.

In comparison with other companies in the American Chemicals industry with market capitalizations ranging from US$4.0b to US$12b, the reported median CEO total compensation was US$6.9m. From this we gather that Ben Gliklich is paid around the median for CEOs in the industry. Furthermore, Ben Gliklich directly owns US$17m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 16% of total compensation represents salary and 84% is other remuneration. Our data reveals that Element Solutions allocates salary more or less in line with the wider market. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Element Solutions Inc's Growth

Element Solutions Inc's earnings per share (EPS) grew 18% per year over the last three years. In the last year, its revenue is up 6.1%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Element Solutions Inc Been A Good Investment?

Element Solutions Inc has generated a total shareholder return of 4.6% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for Element Solutions that investors should look into moving forward.

Important note: Element Solutions 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.