Key Insights

• Innospec's Annual General Meeting to take place on 10th of May

• CEO Patrick Williams' total compensation includes salary of US$1.38m

• The overall pay is comparable to the industry average

• Innospec's EPS grew by 69% over the past three years while total shareholder return over the past three years was 23%

CEO Patrick Williams has done a decent job of delivering relatively good performance at Innospec Inc. (NASDAQ:IOSP) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 10th of May. Here is our take on why we think the CEO compensation looks appropriate.

Check out our latest analysis for Innospec

How Does Total Compensation For Patrick Williams Compare With Other Companies In The Industry?

According to our data, Innospec Inc. has a market capitalization of US$3.0b, and paid its CEO total annual compensation worth US$7.3m over the year to December 2023. That's slightly lower by 7.5% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.4m.

For comparison, other companies in the American Chemicals industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$5.9m. From this we gather that Patrick Williams is paid around the median for CEOs in the industry. Furthermore, Patrick Williams directly owns US$19m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 19% of total compensation represents salary, while the remainder of 81% is other remuneration. Our data reveals that Innospec allocates salary more or less in line with the wider market. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Innospec Inc.'s Growth

Innospec Inc. has seen its earnings per share (EPS) increase by 69% a year over the past three years. The trailing twelve months of revenue was pretty much the same as the prior period.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Innospec Inc. Been A Good Investment?

Innospec Inc. has served shareholders reasonably well, with a total return of 23% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same 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. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Innospec that you should be aware of before investing.

Important note: Innospec 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.