Yahoo Finance Albemarle Corporation's (NYSE:ALB) CEO Will Probably Find It Hard To See A Huge Raise This Year
Key Insights
Albemarle to hold its Annual General Meeting on 7th of May
Total pay for CEO Jerry Masters includes US$1.33m salary
Total compensation is similar to the industry average
Albemarle's EPS grew by 56% over the past three years while total shareholder loss over the past three years was 24%
In the past three years, the share price of Albemarle Corporation (NYSE:ALB) has struggled to grow and now shareholders are sitting on a loss. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 7th of May could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
View our latest analysis for Albemarle
How Does Total Compensation For Jerry Masters Compare With Other Companies In The Industry?
At the time of writing, our data shows that Albemarle Corporation has a market capitalization of US$14b, and reported total annual CEO compensation of US$14m for the year to December 2023. Notably, that's an increase of 30% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.3m.
On comparing similar companies in the American Chemicals industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$14m. This suggests that Albemarle remunerates its CEO largely in line with the industry average. Furthermore, Jerry Masters directly owns US$9.2m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.3m | US$1.1m | 9% |
Other | US$13m | US$10.0m | 91% |
Total Compensation | US$14m | US$11m | 100% |
On an industry level, roughly 19% of total compensation represents salary and 81% is other remuneration. It's interesting to note that Albemarle allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Albemarle Corporation's Growth
Over the past three years, Albemarle Corporation has seen its earnings per share (EPS) grow by 56% per year. In the last year, its revenue is up 31%.
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 Albemarle Corporation Been A Good Investment?
With a three year total loss of 24% for the shareholders, Albemarle Corporation would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for Albemarle (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the 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.
