Andreas Fibig has been the CEO of International Flavors & Fragrances Inc. (NYSE:IFF) since 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. 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.
How Does Andreas Fibig's Compensation Compare With Similar Sized Companies?
According to our data, International Flavors & Fragrances Inc. has a market capitalization of US$15b, and paid its CEO total annual compensation worth US$8.5m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.3m. 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 took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
So Andreas Fibig is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see a visual representation of the CEO compensation at International Flavors & Fragrances, below.
Is International Flavors & Fragrances Inc. Growing?
International Flavors & Fragrances Inc. has reduced its earnings per share by an average of 17% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 40% over the last year.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. It could be important to check this free visual depiction of what analysts expect for the future.
Has International Flavors & Fragrances Inc. Been A Good Investment?
International Flavors & Fragrances Inc. has served shareholders reasonably well, with a total return of 26% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
Andreas Fibig is paid around what is normal the leaders of larger companies.
We see room for improved growth, as well as fairly unremarkable returns over the last three years. But we don't think the CEO compensation is a problem. Whatever your view on compensation, you might want to check if insiders are buying or selling International Flavors & Fragrances shares (free trial).
Important note: International Flavors & Fragrances may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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