It would be hard to discount the role that CEO Fred Boehler has played in delivering the impressive results at Americold Realty Trust (NYSE:COLD) recently. Coming up to the next AGM on 19 May 2021, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.
Comparing Americold Realty Trust's CEO Compensation With the industry
Our data indicates that Americold Realty Trust has a market capitalization of US$9.4b, and total annual CEO compensation was reported as US$5.4m for the year to December 2020. We note that's an increase of 22% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$850k.
For comparison, other companies in the same industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$6.2m. From this we gather that Fred Boehler is paid around the median for CEOs in the industry. Furthermore, Fred Boehler directly owns US$12m worth of shares in the company, implying that they are deeply invested in the company's success.
Talking in terms of the industry, salary represented approximately 15% of total compensation out of all the companies we analyzed, while other remuneration made up 85% of the pie. Although there is a difference in how total compensation is set, Americold Realty Trust more or less reflects the market in terms of setting the salary. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Americold Realty Trust's Growth
Americold Realty Trust's funds from operations (FFO) grew 31% per yearover the last three years. It achieved revenue growth of 14% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 Americold Realty Trust Been A Good Investment?
Most shareholders would probably be pleased with Americold Realty Trust for providing a total return of 84% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 4 warning signs for Americold Realty Trust (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from Americold Realty Trust, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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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