We Discuss Why Venator Materials PLC's (NYSE:VNTR) CEO Compensation May Be Closely Reviewed

By
Simply Wall St
Published
June 03, 2021
NYSE:VNTR
Source: Shutterstock

The results at Venator Materials PLC (NYSE:VNTR) have been quite disappointing recently and CEO Simon Turner bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 10 June 2021. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for Venator Materials

How Does Total Compensation For Simon Turner Compare With Other Companies In The Industry?

Our data indicates that Venator Materials PLC has a market capitalization of US$528m, and total annual CEO compensation was reported as US$5.3m for the year to December 2020. That's a notable increase of 29% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$763k.

For comparison, other companies in the same industry with market capitalizations ranging between US$200m and US$800m had a median total CEO compensation of US$2.2m. Hence, we can conclude that Simon Turner is remunerated higher than the industry median. Moreover, Simon Turner also holds US$1.4m worth of Venator Materials stock directly under their own name.

Component20202019Proportion (2020)
Salary US$763k US$849k 14%
Other US$4.5m US$3.3m 86%
Total CompensationUS$5.3m US$4.1m100%

Talking in terms of the industry, salary represented approximately 17% of total compensation out of all the companies we analyzed, while other remuneration made up 83% of the pie. Venator Materials sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
NYSE:VNTR CEO Compensation June 4th 2021

A Look at Venator Materials PLC's Growth Numbers

Over the last three years, Venator Materials PLC has shrunk its earnings per share by 58% per year. It saw its revenue drop 6.7% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Venator Materials PLC Been A Good Investment?

With a total shareholder return of -73% over three years, Venator Materials PLC shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

So you may want to check if insiders are buying Venator Materials shares with their own money (free access).

Important note: Venator Materials 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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