In 2013 Peter Thomas was appointed CEO of Ferro Corporation (NYSE:FOE). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
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How Does Peter Thomas's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Ferro Corporation has a market cap of US$1.2b, and is paying total annual CEO compensation of US$4.9m. (This is based on the year to December 2018). That's actually a decrease on the year before. While we always look at total compensation first, we note that the salary component is less, at US$941k. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$4.0m.
So Peter Thomas 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 Ferro, below.
Is Ferro Corporation Growing?
On average over the last three years, Ferro Corporation has shrunk earnings per share by 16% each year (measured with a line of best fit). In the last year, its revenue is up 7.6%.
Sadly for shareholders, earnings per share are actually down, over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has Ferro Corporation Been A Good Investment?
With a total shareholder return of 6.9% over three years, Ferro Corporation has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.
Peter Thomas is paid around what is normal the leaders of comparable size companies.
We feel that earnings per share have been a bit disappointing, but and we don't think the total returns are amazing. We wouldn't say the CEO pay is too high, but it's probably fair to say that many shareholders would like to see improved performance, before any pay rise occurs. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Ferro.
Important note: Ferro 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.
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