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Is Freedom Foods Group Limited's (ASX:FNP) CEO Pay Justified?

Simply Wall St

Rory J. Macleod became the CEO of Freedom Foods Group Limited (ASX:FNP) in 2012. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

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See our latest analysis for Freedom Foods Group

How Does Rory J. Macleod's Compensation Compare With Similar Sized Companies?

Our data indicates that Freedom Foods Group Limited is worth AU$1.2b, and total annual CEO compensation is AU$798k. (This figure is for the year to June 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$499k. We examined companies with market caps from AU$578m to AU$2.3b, and discovered that the median CEO total compensation of that group was AU$1.3m.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.

You can see, below, how CEO compensation at Freedom Foods Group has changed over time.

ASX:FNP CEO Compensation, May 25th 2019

Is Freedom Foods Group Limited Growing?

On average over the last three years, Freedom Foods Group Limited has shrunk earnings per share by 62% each year (measured with a line of best fit). In the last year, its revenue is up 35%.

The reduction in earnings per share, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. It could be important to check this free visual depiction of what analysts expect for the future.

Has Freedom Foods Group Limited Been A Good Investment?

Freedom Foods Group Limited has generated a total shareholder return of 30% over three years, so most shareholders would be reasonably content. 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.

In Summary...

It looks like Freedom Foods Group Limited pays its CEO less than similar sized companies.

Rory J. Macleod is paid less than what is normal at similar size companies, and but overall performance has left me uninspired. So shareholders may not be elated, but they shouldn't be worried about the CEO compensation, either. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Freedom Foods Group.

Important note: Freedom Foods Group 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.