Yahoo Finance Shareholders Will Probably Hold Off On Increasing Cabot Corporation's (NYSE:CBT) CEO Compensation For The Time Being
Key Insights
Cabot to hold its Annual General Meeting on 9th of March
CEO Sean Keohane's total compensation includes salary of US$1.04m
Total compensation is 56% above industry average
Cabot's total shareholder return over the past three years was 151% while its EPS grew by 41% over the past three years
CEO Sean Keohane has done a decent job of delivering relatively good performance at Cabot Corporation (NYSE:CBT) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 9th of March. However, some shareholders may still want to keep CEO compensation within reason.
Check out our latest analysis for Cabot
How Does Total Compensation For Sean Keohane Compare With Other Companies In The Industry?
At the time of writing, our data shows that Cabot Corporation has a market capitalization of US$4.6b, and reported total annual CEO compensation of US$7.9m for the year to September 2022. That's slightly lower by 3.6% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.0m.
On comparing similar companies from the American Chemicals industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$5.1m. Accordingly, our analysis reveals that Cabot Corporation pays Sean Keohane north of the industry median. Moreover, Sean Keohane also holds US$15m worth of Cabot stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2022 | 2021 | Proportion (2022) |
Salary | US$1.0m | US$1.0m | 13% |
Other | US$6.9m | US$7.2m | 87% |
Total Compensation | US$7.9m | US$8.2m | 100% |
On an industry level, roughly 16% of total compensation represents salary and 84% is other remuneration. Cabot pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Cabot Corporation's Growth
Cabot Corporation's earnings per share (EPS) grew 41% per year over the last three years. It achieved revenue growth of 19% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Cabot Corporation Been A Good Investment?
We think that the total shareholder return of 151%, over three years, would leave most Cabot Corporation shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for Cabot (1 is concerning!) that you should be aware of before investing here.
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.
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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.
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