In 2014 Gus Griffin was appointed CEO of MGP Ingredients, Inc. (NASDAQ:MGPI). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Gus Griffin’s Compensation Compare With Similar Sized Companies?
According to our data, MGP Ingredients, Inc. has a market capitalization of US$808m, and paid its CEO total annual compensation worth US$2.2m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$595k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from US$400m to US$1.6b, and the median CEO total compensation was US$2.6m.
So Gus Griffin is paid around the average of the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at MGP Ingredients has changed over time.
Is MGP Ingredients, Inc. Growing?
Over the last three years MGP Ingredients, Inc. has grown its earnings per share (EPS) by an average of 7.3% per year (using a line of best fit). In the last year, its revenue is up 4.4%.
I’m not particularly impressed by the revenue growth, but it is good to see modest EPS growth. Considering these factors I’d say performance has been pretty decent, though not amazing. Shareholders might be interested in this free visualization of analyst forecasts.
Has MGP Ingredients, Inc. Been A Good Investment?
Given the total loss of 2.2% over three years, many shareholders in MGP Ingredients, Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
Gus Griffin is paid around the same as most CEOs of similar size companies.
The per share growth could be better, in our view. And we think the shareholder returns – over three years – have been underwhelming. So it would take a bold person to suggest the pay is too modest. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at MGP Ingredients.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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