The Andersons, Inc. (NASDAQ:ANDE) has not performed well recently and CEO Pat Bowe will probably need to up their game. At the upcoming AGM on 07 May 2021, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.
How Does Total Compensation For Pat Bowe Compare With Other Companies In The Industry?
According to our data, The Andersons, Inc. has a market capitalization of US$953m, and paid its CEO total annual compensation worth US$3.8m over the year to December 2020. We note that's a decrease of 13% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$997k.
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$3.8m. This suggests that Andersons remunerates its CEO largely in line with the industry average. What's more, Pat Bowe holds US$5.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. It's interesting to note that Andersons pays out a greater portion of remuneration through salary, compared to the industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
The Andersons, Inc.'s Growth
The Andersons, Inc. has reduced its earnings per share by 46% a year over the last three years. In the last year, its revenue changed by just 0.5%.
The decline in EPS is a bit concerning. And the flat revenue is seriously uninspiring. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 The Andersons, Inc. Been A Good Investment?
With a three year total loss of 5.4% for the shareholders, The Andersons, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 4 warning signs for Andersons (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.
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.
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This article by Simply Wall St is general in nature. 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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