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Bob Patel became the CEO of LyondellBasell Industries N.V. (NYSE:LYB) in 2015. First, this article will compare CEO compensation with compensation at 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.
How Does Bob Patel’s Compensation Compare With Similar Sized Companies?
Our data indicates that LyondellBasell Industries N.V. is worth US$33b, and total annual CEO compensation is US$18m. (This is based on the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.5m. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO compensation was US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren’t that many of them.
As you can see, Bob Patel is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean LyondellBasell Industries N.V. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at LyondellBasell Industries, below.
Is LyondellBasell Industries N.V. Growing?
On average over the last three years, LyondellBasell Industries N.V. has grown earnings per share (EPS) by 17% each year (using a line of best fit). In the last year, its revenue is up 13%.
This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has LyondellBasell Industries N.V. Been A Good Investment?
LyondellBasell Industries N.V. has served shareholders reasonably well, with a total return of 27% over three years. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
We compared total CEO remuneration at LyondellBasell Industries N.V. with the amount paid at other large companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. We also note that, over the same time frame, shareholder returns haven’t been bad. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we’d recommend further research on management. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at LyondellBasell Industries.
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.