Chuck MacFarlane became the CEO of Otter Tail Corporation (NASDAQ:OTTR) in 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
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How Does Chuck MacFarlane's Compensation Compare With Similar Sized Companies?
Our data indicates that Otter Tail Corporation is worth US$2.0b, and total annual CEO compensation is US$3.3m. (This number is for the twelve months until December 2018). That's below the compensation, last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$650k. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$4.1m.
So Chuck MacFarlane is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see a visual representation of the CEO compensation at Otter Tail, below.
Is Otter Tail Corporation Growing?
Over the last three years Otter Tail Corporation has grown its earnings per share (EPS) by an average of 12% per year (using a line of best fit). Its revenue is up 5.1% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.
Has Otter Tail Corporation Been A Good Investment?
Most shareholders would probably be pleased with Otter Tail Corporation for providing a total return of 92% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Chuck MacFarlane is paid around the same as most CEOs of similar size companies.
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. Whatever your view on compensation, you might want to check if insiders are buying or selling Otter Tail shares (free trial).
If you want to buy a stock that is better than Otter Tail, this free list of high return, low debt companies is a great place to look.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.