Yahoo Finance Why We Think Balchem Corporation's (NASDAQ:BCPC) CEO Compensation Is Not Excessive At All
Key Insights
Balchem to hold its Annual General Meeting on 20th of June
Salary of US$1.16m is part of CEO Ted Harris's total remuneration
The total compensation is similar to the average for the industry
Balchem's total shareholder return over the past three years was 18% while its EPS grew by 8.9% over the past three years
CEO Ted Harris has done a decent job of delivering relatively good performance at Balchem Corporation (NASDAQ:BCPC) recently. As shareholders go into the upcoming AGM on 20th of June, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Here is our take on why we think the CEO compensation looks appropriate.
See our latest analysis for Balchem
How Does Total Compensation For Ted Harris Compare With Other Companies In The Industry?
Our data indicates that Balchem Corporation has a market capitalization of US$4.9b, and total annual CEO compensation was reported as US$5.9m for the year to December 2023. Notably, that's a decrease of 51% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.2m.
On examining similar-sized companies in the American Chemicals industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$5.5m. So it looks like Balchem compensates Ted Harris in line with the median for the industry. What's more, Ted Harris holds US$7.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.2m | US$1.1m | 20% |
Other | US$4.7m | US$11m | 80% |
Total Compensation | US$5.9m | US$12m | 100% |
Talking in terms of the industry, salary represented approximately 19% of total compensation out of all the companies we analyzed, while other remuneration made up 81% of the pie. Our data reveals that Balchem 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.
Balchem Corporation's Growth
Balchem Corporation's earnings per share (EPS) grew 8.9% per year over the last three years. It saw its revenue drop 1.7% over the last year.
We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Balchem Corporation Been A Good Investment?
Balchem Corporation has served shareholders reasonably well, with a total return of 18% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
To Conclude...
The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Balchem that investors should think about before committing capital to this stock.
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.
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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.
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