How Does Green Plains' (NASDAQ:GPRE) CEO Pay Compare With Company Performance?
Todd Becker has been the CEO of Green Plains Inc. (NASDAQ:GPRE) since 2009, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Green Plains pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for Green Plains
How Does Total Compensation For Todd Becker Compare With Other Companies In The Industry?
Our data indicates that Green Plains Inc. has a market capitalization of US$431m, and total annual CEO compensation was reported as US$4.9m for the year to December 2019. That's a fairly small increase of 7.1% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$700k.
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$4.1m. From this we gather that Todd Becker is paid around the median for CEOs in the industry. Furthermore, Todd Becker directly owns US$6.3m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$700k | US$671k | 14% |
Other | US$4.2m | US$3.9m | 86% |
Total Compensation | US$4.9m | US$4.6m | 100% |
Talking in terms of the industry, salary represented approximately 19% of total compensation out of all the companies we analyzed, while other remuneration made up 81% of the pie. In Green Plains' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Green Plains Inc.'s Growth
Green Plains Inc. has reduced its earnings per share by 123% a year over the last three years. It achieved revenue growth of 9.4% over the last year.
Few shareholders would be pleased to read that earnings have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in earnings per share. 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 Green Plains Inc. Been A Good Investment?
Given the total shareholder loss of 34% over three years, many shareholders in Green Plains Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
As we touched on above, Green Plains Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, earnings growth and shareholder returns have been in the red for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 1 which is a bit concerning) in Green Plains we think you should know about.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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