Yahoo Finance It Looks Like Huntsman Corporation's (NYSE:HUN) CEO May Expect Their Salary To Be Put Under The Microscope
Key Insights
Huntsman will host its Annual General Meeting on 2nd of May
Salary of US$1.40m is part of CEO Peter Huntsman's total remuneration
The overall pay is 147% above the industry average
Huntsman's EPS declined by 31% over the past three years while total shareholder loss over the past three years was 8.0%
Huntsman Corporation (NYSE:HUN) has not performed well recently and CEO Peter Huntsman will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 2nd of May. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.
See our latest analysis for Huntsman
How Does Total Compensation For Peter Huntsman Compare With Other Companies In The Industry?
According to our data, Huntsman Corporation has a market capitalization of US$4.2b, and paid its CEO total annual compensation worth US$15m over the year to December 2023. That's a notable increase of 14% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.4m.
For comparison, other companies in the American Chemicals industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$6.2m. Accordingly, our analysis reveals that Huntsman Corporation pays Peter Huntsman north of the industry median. Furthermore, Peter Huntsman directly owns US$193m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.4m | US$1.7m | 9% |
Other | US$14m | US$12m | 91% |
Total Compensation | US$15m | US$13m | 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. It's interesting to note that Huntsman allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Huntsman Corporation's Growth Numbers
Huntsman Corporation has reduced its earnings per share by 31% a year over the last three years. Its revenue is down 24% over the previous year.
Overall this is not a very positive result for shareholders. 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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Huntsman Corporation Been A Good Investment?
Since shareholders would have lost about 8.0% over three years, some Huntsman Corporation investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.
In Summary...
Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Huntsman that investors should think about before committing capital to this stock.
Important note: Huntsman 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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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.
