In 2011 John Hayes was appointed CEO of Ball Corporation (NYSE:BLL). This analysis aims first to contrast CEO compensation with other large companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does John Hayes's Compensation Compare With Similar Sized Companies?
Our data indicates that Ball Corporation is worth US$21b, and total annual CEO compensation was reported as US$12m for the year to December 2019. We note that's an increase of 8.4% above last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.3m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$12m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Ball stands. Talking in terms of the sector, salary represented approximately 13% of total compensation out of all the companies we analysed, while other remuneration made up 87% of the pie. Ball does not set aside a larger portion of remuneration in the form of salary, maintaining the same rate as the wider market.
That means John Hayes receives fairly typical remuneration for the CEO of a large company. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context. The graphic below shows how CEO compensation at Ball has changed from year to year.
Is Ball Corporation Growing?
Ball Corporation has seen earnings per share (EPS) move positively by an average of 22% a year, over the last three years (using a line of best fit). Its revenue is down 1.4% over last year.
This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Ball Corporation Been A Good Investment?
I think that the total shareholder return of 85%, over three years, would leave most Ball Corporation shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
John Hayes is paid around what is normal for the leaders of larger companies.
The company is growing earnings per share and total shareholder returns have been pleasing. Indeed, many might consider the pay rather modest, given the solid company performance! Shifting gears from CEO pay for a second, we've spotted 2 warning signs for Ball you should be aware of, and 1 of them is concerning.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.