Here's Why Shareholders May Want To Be Cautious With Increasing CF Industries Holdings, Inc.'s (NYSE:CF) CEO Pay Packet

Key Insights

• CF Industries Holdings will host its Annual General Meeting on 6th of May
• CEO Tony Will's total compensation includes salary of US$1.40m
• The overall pay is comparable to the industry average
• CF Industries Holdings' EPS grew by 20% over the past three years while total shareholder loss over the past three years was 15%

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In the past three years, the share price of CF Industries Holdings, Inc. (NYSE:CF) has struggled to grow and now shareholders are sitting on a loss. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 6th of May. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for CF Industries Holdings

How Does Total Compensation For Tony Will Compare With Other Companies In The Industry?

Our data indicates that CF Industries Holdings, Inc. has a market capitalization of US$13b, and total annual CEO compensation was reported as US$12m for the year to December 2024. That's a slight decrease of 4.7% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.4m.

In comparison with other companies in the American Chemicals industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$13m. So it looks like CF Industries Holdings compensates Tony Will in line with the median for the industry. What's more, Tony Will holds US$40m 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 17% of total compensation represents salary and 83% is other remuneration. CF Industries Holdings sets aside a smaller share of compensation for 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.

CF Industries Holdings, Inc.'s Growth

CF Industries Holdings, Inc. has seen its earnings per share (EPS) increase by 20% a year over the past three years. Its revenue is down 10% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has CF Industries Holdings, Inc. Been A Good Investment?

Since shareholders would have lost about 15% over three years, some CF Industries Holdings, Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for CF Industries Holdings that you should be aware of before investing.

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.