Yahoo Finance Here's Why It's Unlikely That Sensient Technologies Corporation's (NYSE:SXT) CEO Will See A Pay Rise This Year
Key Insights
Sensient Technologies to hold its Annual General Meeting on 25th of April
Total pay for CEO Paul Manning includes US$1.08m salary
Total compensation is similar to the industry average
Sensient Technologies' EPS declined by 5.2% over the past three years while total shareholder loss over the past three years was 11%
The results at Sensient Technologies Corporation (NYSE:SXT) have been quite disappointing recently and CEO Paul Manning 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 25th of April. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.
View our latest analysis for Sensient Technologies
Comparing Sensient Technologies Corporation's CEO Compensation With The Industry
According to our data, Sensient Technologies Corporation has a market capitalization of US$2.9b, and paid its CEO total annual compensation worth US$6.2m over the year to December 2023. We note that's a decrease of 19% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.
In comparison with other companies in the American Chemicals industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$6.2m. This suggests that Sensient Technologies remunerates its CEO largely in line with the industry average. Moreover, Paul Manning also holds US$16m worth of Sensient Technologies stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.1m | US$1.0m | 17% |
Other | US$5.1m | US$6.6m | 83% |
Total Compensation | US$6.2m | US$7.6m | 100% |
Speaking on an industry level, nearly 19% of total compensation represents salary, while the remainder of 81% is other remuneration. Our data reveals that Sensient Technologies allocates salary more or less in line with the wider market. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Sensient Technologies Corporation's Growth
Over the last three years, Sensient Technologies Corporation has shrunk its earnings per share by 5.2% per year. It achieved revenue growth of 1.4% over the last year.
Overall this is not a very positive result for shareholders. The fairly low revenue growth fails to impress given that the EPS is down. 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 Sensient Technologies Corporation Been A Good Investment?
With a three year total loss of 11% for the shareholders, Sensient Technologies Corporation would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. 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.
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. We did our research and spotted 2 warning signs for Sensient Technologies that investors should look into moving forward.
Switching gears from Sensient Technologies, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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.
