Pat Bowe has been the CEO of The Andersons, Inc. (NASDAQ:ANDE) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing The Andersons, Inc.'s CEO Compensation With the industry
Our data indicates that The Andersons, Inc. has a market capitalization of US$689m, and total annual CEO compensation was reported as US$4.3m for the year to December 2019. That's a notable increase of 11% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$953k.
On examining similar-sized companies in the industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$4.3m. This suggests that Andersons remunerates its CEO largely in line with the industry average. Furthermore, Pat Bowe directly owns US$3.7m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, around 17% of total compensation represents salary and 83% is other remuneration. It's interesting to note that Andersons pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at The Andersons, Inc.'s Growth Numbers
The Andersons, Inc. has reduced its earnings per share by 44% a year over the last three years. Its revenue is up 6.2% over the last year.
The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. 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?
Given the total shareholder loss of 24% over three years, many shareholders in The Andersons, Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As we noted earlier, Andersons pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for Andersons you should be aware of, and 1 of them is significant.
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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