U.S. Markets close in 4 hrs 4 mins

Is Farmland Partners Inc.'s (NYSE:FPI) CEO Pay Fair?

Simply Wall St

Paul Pittman became the CEO of Farmland Partners Inc. (NYSE:FPI) in 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. 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.

See our latest analysis for Farmland Partners

How Does Paul Pittman's Compensation Compare With Similar Sized Companies?

Our data indicates that Farmland Partners Inc. is worth US$214m, and total annual CEO compensation was reported as US$1.1m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$477k. We looked at a group of companies with market capitalizations from US$100m to US$400m, and the median CEO total compensation was US$1.1m.

That means Paul Pittman receives fairly typical remuneration for the CEO of a company that size. 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.

The graphic below shows how CEO compensation at Farmland Partners has changed from year to year.

NYSE:FPI CEO Compensation, November 10th 2019

Is Farmland Partners Inc. Growing?

Farmland Partners Inc. has increased its earnings per share (EPS) by an average of 33% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 10%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. You might want to check this free visual report on analyst forecasts for future earnings.

Has Farmland Partners Inc. Been A Good Investment?

Since shareholders would have lost about 27% over three years, some Farmland Partners Inc. shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Paul Pittman is paid around the same as most CEOs of similar size companies.

We think that the EPS growth is very pleasing, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the the positives we don't think the CEO pays is too high, but it's certainly hard to argue it is too low. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Farmland Partners (free visualization of insider trades).

Important note: Farmland Partners 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.

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 editorial-team@simplywallst.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. Thank you for reading.