What We Learned About Balchem's (NASDAQ:BCPC) CEO Pay

Ted Harris became the CEO of Balchem Corporation (NASDAQ:BCPC) in 2015, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Balchem

Comparing Balchem Corporation's CEO Compensation With the industry

According to our data, Balchem Corporation has a market capitalization of US$3.1b, and paid its CEO total annual compensation worth US$3.8m over the year to December 2019. That's a notable increase of 14% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$915k.

In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$5.7m. This suggests that Ted Harris is paid below the industry median. Furthermore, Ted Harris directly owns US$4.9m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 19% of total compensation represents salary and 81% is other remuneration. According to our research, Balchem has allocated a higher percentage of pay to salary in comparison to the wider industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Balchem Corporation's Growth Numbers

Balchem Corporation has seen its earnings per share (EPS) increase by 9.3% a year over the past three years. Its revenue is up 5.6% over the last year.

We'd prefer higher revenue growth, but we're happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Balchem Corporation Been A Good Investment?

Balchem Corporation has generated a total shareholder return of 20% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

As we noted earlier, Balchem pays its CEO lower than the norm for similar-sized companies belonging to the same industry. But, shareholder returns and EPS growth have been unimpressive recently. So, even though we don't think CEO compensation is too generous, shareholders will likely want to see more growth before they agree that Ted deserves a raise.

So you may want to check if insiders are buying Balchem shares with their own money (free access).

Important note: Balchem 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.

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. 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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