A. Schulman Inc. Overview
The company I chose to review for corporate governance is A. Schulman Inc. This company is ranked number two in resin and color compound producers in the U.S. (Top Stories Plastic News, 2016). I thought this particular firm would be great to analyze since this company is my company competitor. Most of the information used as a reference is company from their investor page on their webpage. The proxy and 10-K statement recently filed is from October 2015.
A. Schulman Inc. Competitor
A. Schulman Inc. has many competitors in the plastics and chemical industry. The Dow Chemical Co. was named among others as a competitor in the Nasdaq (2016, pg. 1). Hoovers also listed Dow as well as being a key competitor in the industry as well (Hoovers, 2016). Although Dow’s most recent 2016 proxy and 10 -k is available, I’m going to use their 2015 to stay consistent with comparing A. Schulman Inc.
A. Schulman Inc. Proxy Information
Reviewing the 10-K for A. Schulman Inc. the compensation plan is very lucrative for both the CEO and board members of the company. According to the 10-k (pg. 102) and proxy reports (pg. 23), base wages range from $160,000 to over $500 million (A. Schulman, 2015). The bonus payouts and performance incentives goes by percentages. One of the CEO has 100 % in bonus payouts, while another CEO has 75% in bonus payouts and 100% in performance incentive (A. Schulman Proxy, 2015, pg.24). I’m assuming this is due to stake holders preference, but the company does have a compensation committee among the board of directors. I did find it strange that employee directors make less than non-employee directors; again I am assuming this is because non employee’s doesn’t receive...
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...the A. Schulman board is controlling decision making within the firm. Instead of voting on giving the new CEO over $700 -thousand, the company could have used some of the money to keep one of Ohio color plants in operation. Made the money used for the raise, could have given the Ohio division resource needed to better drive the market. Given the fact that A. Schulman is a solid company and a leader in the market, I would not want to risk joining their firm in hopes my division want shut down due to lack of resources or focus how to rebuild my department. The company seems like only upper-level management are being heavily rewarded. Also it appears that I would have to be an older man to be able to be considered for a possible spot on the board of directors.
I have included a chart showing the stock performance for A. Schulman and Dow Chemical over the past 10 years:
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