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Eric Wintemute became the CEO of American Vanguard Corporation (NYSE:AVD) in 1994, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for American Vanguard.
How Does Total Compensation For Eric Wintemute Compare With Other Companies In The Industry?
At the time of writing, our data shows that American Vanguard Corporation has a market capitalization of US$431m, and reported total annual CEO compensation of US$2.0m for the year to December 2019. Notably, that's a decrease of 15% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$668k.
In comparison with other companies in the industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$3.8m. This suggests that Eric Wintemute is paid below the industry median. What's more, Eric Wintemute holds US$14m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 19% of total compensation represents salary, while the remainder of 81% is other remuneration. American Vanguard is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at American Vanguard Corporation's Growth Numbers
Over the last three years, American Vanguard Corporation has shrunk its earnings per share by 9.1% per year. The trailing twelve months of revenue was pretty much the same as the prior period.
The decline in EPS is a bit concerning. And the flat revenue hardly impresses. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has American Vanguard Corporation Been A Good Investment?
Since shareholders would have lost about 35% over three years, some American Vanguard Corporation investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
As we touched on above, American Vanguard Corporation is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. EPS growth has failed to impress us, and the same can be said about shareholder returns. It's tough to say that Eric is earning a very high compensation, but shareholders will likely want to see healthier investor returns before agreeing that a raise is in order.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 3 warning signs for American Vanguard that investors should look into moving forward.
Switching gears from American Vanguard, 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.
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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