Why We Think The CEO Of AMMO, Inc. (NASDAQ:POWW) May Soon See A Pay Rise

Shareholders will be pleased by the impressive results for AMMO, Inc. (NASDAQ:POWW) recently and CEO Fred Wagenhals has played a key role. At the upcoming AGM on 25 October 2021, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

Check out our latest analysis for AMMO

Comparing AMMO, Inc.'s CEO Compensation With the industry

According to our data, AMMO, Inc. has a market capitalization of US$708m, and paid its CEO total annual compensation worth US$494k over the year to March 2021. We note that's an increase of 65% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$240k.

In comparison with other companies in the industry with market capitalizations ranging from US$400m to US$1.6b, the reported median CEO total compensation was US$3.1m. That is to say, Fred Wagenhals is paid under the industry median. What's more, Fred Wagenhals holds US$45m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	US$240k	US$120k	49%
Other	US$254k	US$180k	51%
Total Compensation	US$494k	US$300k	100%

Speaking on an industry level, nearly 18% of total compensation represents salary, while the remainder of 82% is other remuneration. AMMO is paying a higher share of its remuneration through a salary in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

AMMO, Inc.'s Growth

AMMO, Inc. has seen its earnings per share (EPS) increase by 22% a year over the past three years. In the last year, its revenue is up 381%.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 AMMO, Inc. Been A Good Investment?

Boasting a total shareholder return of 89% over three years, AMMO, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Some shareholders will probably be more lenient on CEO compensation in the upcoming AGM given the pleasing performance of the company recently. However, despite the strong growth in earnings and share price growth, the focus for shareholders would be how the company plans to steer the company towards sustainable profitability in the near future.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 3 warning signs (and 1 which is concerning) in AMMO we think you should know about.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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.

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