Stock Analysis

We Think The Compensation For Green Plains Inc.'s (NASDAQ:GPRE) CEO Looks About Right

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NasdaqGS:GPRE
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Performance at Green Plains Inc. (NASDAQ:GPRE) has been rather uninspiring recently and shareholders may be wondering how CEO Todd Becker plans to fix this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 05 May 2021. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We think CEO compensation looks appropriate given the data we have put together.

See our latest analysis for Green Plains

How Does Total Compensation For Todd Becker Compare With Other Companies In The Industry?

According to our data, Green Plains Inc. has a market capitalization of US$1.2b, and paid its CEO total annual compensation worth US$3.1m over the year to December 2020. Notably, that's a decrease of 37% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$700k.

For comparison, other companies in the same industry with market capitalizations ranging between US$1.0b and US$3.2b had a median total CEO compensation of US$4.9m. In other words, Green Plains pays its CEO lower than the industry median. Moreover, Todd Becker also holds US$17m worth of Green Plains stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary US$700k US$700k 23%
Other US$2.4m US$4.2m 77%
Total CompensationUS$3.1m US$4.9m100%

Talking in terms of the industry, salary represented approximately 20% of total compensation out of all the companies we analyzed, while other remuneration made up 80% of the pie. Green Plains 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.

ceo-compensation
NasdaqGS:GPRE CEO Compensation April 28th 2021

Green Plains Inc.'s Growth

Green Plains Inc. has reduced its earnings per share by 100% a year over the last three years. In the last year, its revenue is down 20%.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Green Plains Inc. Been A Good Investment?

We think that the total shareholder return of 53%, over three years, would leave most Green Plains Inc. shareholders smiling. 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...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean these strong returns may not continue. Shareholders might want to question the board about these concerns, and revisit their investment thesis for the company.

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. In our study, we found 4 warning signs for Green Plains you should be aware of, and 2 of them are potentially serious.

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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