It Looks Like Shareholders Would Probably Approve Catalent, Inc.'s (NYSE:CTLT) CEO Compensation Package

By
Simply Wall St
Published
October 21, 2021
NYSE:CTLT
Source: Shutterstock

We have been pretty impressed with the performance at Catalent, Inc. (NYSE:CTLT) recently and CEO John Chiminski deserves a mention for their role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 28 October 2021. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

View our latest analysis for Catalent

How Does Total Compensation For John Chiminski Compare With Other Companies In The Industry?

At the time of writing, our data shows that Catalent, Inc. has a market capitalization of US$23b, and reported total annual CEO compensation of US$13m for the year to June 2021. Notably, that's an increase of 37% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.1m.

In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$14m. This suggests that Catalent remunerates its CEO largely in line with the industry average. What's more, John Chiminski holds US$19m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20212020Proportion (2021)
Salary US$1.1m US$964k 8%
Other US$12m US$8.2m 92%
Total CompensationUS$13m US$9.2m100%

Talking in terms of the industry, salary represented approximately 28% of total compensation out of all the companies we analyzed, while other remuneration made up 72% of the pie. In Catalent's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
NYSE:CTLT CEO Compensation October 22nd 2021

A Look at Catalent, Inc.'s Growth Numbers

Catalent, Inc. has seen its earnings per share (EPS) increase by 69% a year over the past three years. In the last year, its revenue is up 29%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Catalent, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Catalent, Inc. for providing a total return of 239% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in 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 is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 3 warning signs for Catalent (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

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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