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Is The Andersons, Inc.'s (NASDAQ:ANDE) CEO Being Overpaid?

Simply Wall St

Pat Bowe has been the CEO of The Andersons, Inc. (NASDAQ:ANDE) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Andersons

How Does Pat Bowe's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that The Andersons, Inc. has a market cap of US$826m, and reported total annual CEO compensation of US$3.9m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$923k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from US$400m to US$1.6b, and the median CEO total compensation was US$2.6m.

Thus we can conclude that Pat Bowe receives more in total compensation than the median of a group of companies in the same market, and of similar size to The Andersons, Inc.. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

The graphic below shows how CEO compensation at Andersons has changed from year to year.

NasdaqGS:ANDE CEO Compensation, December 19th 2019

Is The Andersons, Inc. Growing?

Over the last three years The Andersons, Inc. has grown its earnings per share (EPS) by an average of 57% per year (using a line of best fit). In the last year, its revenue is up 119%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. It could be important to check this free visual depiction of what analysts expect for the future.

Has The Andersons, Inc. Been A Good Investment?

With a three year total loss of 38%, The Andersons, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared the total CEO remuneration paid by The Andersons, Inc., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Andersons (free visualization of insider trades).

If you want to buy a stock that is better than Andersons, this free list of high return, low debt companies is a great place to look.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.