Is CF Industries Holdings Inc’s (NYSE:CF) CEO Paid At A Competitive Rate?

In 2014 W. Will was appointed CEO of CF Industries Holdings Inc (NYSE:CF). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for CF Industries Holdings

How Does W. Will’s Compensation Compare With Similar Sized Companies?

According to our data, CF Industries Holdings Inc has a market capitalization of US$11b, and pays its CEO total annual compensation worth US$9.5m. Notably, that’s an increase of 47% over the year before. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO compensation was US$11m.

So W. Will receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.

You can see a visual representation of the CEO compensation at CF Industries Holdings, below.

NYSE:CF CEO Compensation November 15th 18
NYSE:CF CEO Compensation November 15th 18

Is CF Industries Holdings Inc Growing?

Over the last three years CF Industries Holdings Inc has shrunk its earnings per share by an average of 12% per year. In the last year, its revenue is up 13%.

Few shareholders would be pleased to read that earnings per share are lower over three years. There’s no doubt that the silver lining is that revenue is up. But it isn’t sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.

Shareholders might be interested in this free visualization of analyst forecasts. .

Has CF Industries Holdings Inc Been A Good Investment?

CF Industries Holdings Inc has served shareholders reasonably well, with a total return of 15% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary…

Remuneration for W. Will is close enough to the median pay for a CEO of a large company .

The company isn’t growing earnings per share, and nor have the total returns inspired us. We doubt shareholders are particularly happy to see that the CEO compensation increased on last year. We’re not saying the CEO pay is too generous, but it’s probably fair to say that many shareholders would like to see improved performance, before any pay rise occurs. So you may want to check if insiders are buying CF Industries Holdings Inc shares with their own money (free access).

Or you might rather take a peek at this analytical visualization of historic cash flow, earnings and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.