Luke Kissam has been the CEO of Albemarle Corporation (NYSE:ALB) since 2011. This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Luke Kissam’s Compensation Compare With Similar Sized Companies?
According to our data, Albemarle Corporation has a market capitalization of US$10.5b, and pays its CEO total annual compensation worth US$8m. That’s a modest increase of 0.7% on the prior year year. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO compensation was US$11m.
So Luke Kissam receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Albemarle has changed from year to year.
Is Albemarle Corporation Growing?
On average over the last three years, Albemarle Corporation has shrunk earnings per share by 8.2% each year. In the last year, its revenue is up 17%.
Unfortunately, earnings per share have trended lower over the last three years. And while it’s good to see some good revenue growth recently, the growth isn’t really fast enough for me to put aside my concerns around earnings. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
Has Albemarle Corporation Been A Good Investment?
Boasting a total shareholder return of 93% over three years, Albemarle Corporation has done well by shareholders. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.
