We Discuss Why The CEO Of Federal Agricultural Mortgage Corporation (NYSE:AGM) Is Due For A Pay Rise

Key Insights

• Federal Agricultural Mortgage will host its Annual General Meeting on 15th of May
• CEO Brad Nordholm's total compensation includes salary of US$800.0k
• The overall pay is 61% below the industry average
• Over the past three years, Federal Agricultural Mortgage's EPS grew by 17% and over the past three years, the total shareholder return was 94%

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The impressive results at Federal Agricultural Mortgage Corporation (NYSE:AGM) recently will be great news for shareholders. This would be kept in mind at the upcoming AGM on 15th of May which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. 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.

View our latest analysis for Federal Agricultural Mortgage

How Does Total Compensation For Brad Nordholm Compare With Other Companies In The Industry?

At the time of writing, our data shows that Federal Agricultural Mortgage Corporation has a market capitalization of US$1.9b, and reported total annual CEO compensation of US$3.3m for the year to December 2024. We note that's a decrease of 42% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$800k.

In comparison with other companies in the American Diversified Financial industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$8.4m. Accordingly, Federal Agricultural Mortgage pays its CEO under the industry median. Furthermore, Brad Nordholm directly owns US$2.8m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 12% of total compensation represents salary, while the remainder of 88% is other remuneration. According to our research, Federal Agricultural Mortgage has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Federal Agricultural Mortgage Corporation's Growth

Over the past three years, Federal Agricultural Mortgage Corporation has seen its earnings per share (EPS) grow by 17% per year. In the last year, its revenue is up 4.1%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Federal Agricultural Mortgage Corporation Been A Good Investment?

Most shareholders would probably be pleased with Federal Agricultural Mortgage Corporation for providing a total return of 94% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Federal Agricultural Mortgage (1 is concerning!) that you should be aware of before investing here.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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.