Huntsman Corporation ( HUN Quick Quote HUN - Free Report) announced a review of strategic options for its Textile Effects Division and a multi-year compensation plan.
The strategic review of the Textile Effects Division, headquartered in Singapore, includes a possible sale of the division and is in line with its goals to boost shareholders’ value. The review will commence early in the first quarter of the next year. The division is expected to generate around $100 million of Adjusted EBITDA in 2021.
Huntsman has not set a timetable or deadline to close its evaluation of strategic alternatives for the division but intends to complete it soon.
Huntsman’s board has authorized management to execute a multi-year compensation plan for all officers and vice presidents. A majority of the plan participants' equity incentives will be performance-based and attached to relative total shareholder return and free cash flow measures.
Moreover, its entire incentive cash bonus program will be tied to the achievement of the adjusted EBITDA margin, optimization program and free cash flow targets set out at the Investor Day. Each of these targets builds on a multi-year effort to enhance its 2021 performance.
Shares of Huntsman have increased 32.8% in the past year compared with a 14% rise of the
industry. Image Source: Zacks Investment Research
The company, in its last earnings call, stated that it is seeing strong pent-up demand across its businesses amid supply chain disruptions. Its strong balance sheet along with cash generation allows it to continue returning capital to shareholders. It is investing in high-return organic projects that will boost its total returns and improve margins over the next 24-36 months.
Zacks Rank & Key Picks
Huntsman currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the basic materials space are
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