Teddy Gottwald has been the CEO of NewMarket Corporation (NYSE:NEU) since 2004. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Teddy Gottwald’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that NewMarket Corporation has a market cap of US$4.6b, and is paying total annual CEO compensation of US$3m. We note that’s an increase of 31% above last year. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO compensation was US$5m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
You can see a visual representation of the CEO compensation at NewMarket, below.
Is NewMarket Corporation Growing?
Over the last three years NewMarket Corporation has shrunk its earnings per share by an average of 9.0% per year. It achieved revenue growth of 8.0% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
Although we don’t have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has NewMarket Corporation Been A Good Investment?
With a total shareholder return of 8.1% over three years, NewMarket Corporation has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.
It appears that NewMarket Corporation remunerates its CEO below most similar sized companies.
Shareholders should note that compensation for Teddy Gottwald is under the median of a group of similar sized companies. But the business isn’t growing earnings per share, and the returns to shareholders haven’t been wonderful. We would like to see EPS growth from the business, although we wouldn’t say the CEO pay is high. So you may want to check if insiders are buying NewMarket Corporation shares with their own money (free access).
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.