Tony Will became the CEO of CF Industries Holdings, Inc. (NYSE:CF) in 2014. First, this article will compare CEO compensation with compensation at other large companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Tony Will's Compensation Compare With Similar Sized Companies?
According to our data, CF Industries Holdings, Inc. has a market capitalization of US$10b, and pays its CEO total annual compensation worth US$7.8m. (This figure is for the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$1.2m. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO total compensation was US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
A first glance this seems like a real positive for shareholders, since Tony Will is paid less than the average total compensation paid by other large companies. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at CF Industries Holdings has changed over time.
Is CF Industries Holdings, Inc. Growing?
CF Industries Holdings, Inc. has increased its earnings per share (EPS) by an average of 65% a year, over the last three years (using a line of best fit). Its revenue is up 11% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Shareholders might be interested in this free visualization of analyst forecasts.
Has CF Industries Holdings, Inc. Been A Good Investment?
Boasting a total shareholder return of 108% over three years, CF Industries Holdings, Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
It appears that CF Industries Holdings, Inc. remunerates its CEO below most large companies. Since the business is growing, many would argue this suggests the pay is modest. The strong history of shareholder returns might even have some thinking that Tony Will deserves a raise!
It's not often we see shareholders do so well, and yet the CEO is paid modestly. It would be even more positive if company insiders are buying shares. So you may want to check if insiders are buying CF Industries Holdings shares with their own money (free access).
If you want to buy a stock that is better than CF Industries Holdings, this free list of high return, low debt companies is a great place to look.
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