Yahoo Finance It Looks Like Stepan Company's (NYSE:SCL) CEO May Expect Their Salary To Be Put Under The Microscope
Key Insights
Stepan to hold its Annual General Meeting on 30th of April
CEO Scott Behrens' total compensation includes salary of US$933.3k
The total compensation is similar to the average for the industry
Over the past three years, Stepan's EPS fell by 31% and over the past three years, the total loss to shareholders 32%
Shareholders will probably not be too impressed with the underwhelming results at Stepan Company (NYSE:SCL) recently. At the upcoming AGM on 30th of April, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.
Check out our latest analysis for Stepan
Comparing Stepan Company's CEO Compensation With The Industry
Our data indicates that Stepan Company has a market capitalization of US$1.9b, and total annual CEO compensation was reported as US$4.1m for the year to December 2023. We note that's a decrease of 17% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$933k.
On comparing similar companies from the American Chemicals industry with market caps ranging from US$1.0b to US$3.2b, we found that the median CEO total compensation was US$5.3m. From this we gather that Scott Behrens is paid around the median for CEOs in the industry. Furthermore, Scott Behrens directly owns US$1.6m worth of shares in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$933k | US$781k | 23% |
Other | US$3.2m | US$4.2m | 77% |
Total Compensation | US$4.1m | US$5.0m | 100% |
Speaking on an industry level, nearly 19% of total compensation represents salary, while the remainder of 81% is other remuneration. Stepan is paying a higher share of its remuneration through a salary in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Stepan Company's Growth
Over the last three years, Stepan Company has shrunk its earnings per share by 31% per year. It saw its revenue drop 16% over the last year.
The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Stepan Company Been A Good Investment?
The return of -32% over three years would not have pleased Stepan Company shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business 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 4 warning signs for Stepan that investors should think about before committing capital to this stock.
Important note: Stepan 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.
