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Is Fresh Del Monte Produce Inc’s (NYSE:FDP) CEO Pay Fair?

In 1996 Mohammed Abu-Ghazaleh was appointed CEO of Fresh Del Monte Produce Inc (NYSE:FDP). 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. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Fresh Del Monte Produce

How Does Mohammed Abu-Ghazaleh’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Fresh Del Monte Produce Inc has a market cap of US$1.6b, and is paying total annual CEO compensation of US$8.5m. (This figure is for the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$1.2m. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO compensation was US$3.4m.

As you can see, Mohammed Abu-Ghazaleh is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Fresh Del Monte Produce Inc is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Fresh Del Monte Produce, below.

NYSE:FDP CEO Compensation November 30th 18
NYSE:FDP CEO Compensation November 30th 18

Is Fresh Del Monte Produce Inc Growing?

Fresh Del Monte Produce Inc has reduced its earnings per share by an average of 15% a year, over the last three years. Its revenue is up 7.7% over last year.

Unfortunately, earnings per share have trended lower over the last three years. The modest increase in revenue in the last year isn’t enough to make me overlook the disappointing change in earnings per share. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.

Shareholders might be interested in this free visualization of analyst forecasts. .

Has Fresh Del Monte Produce Inc Been A Good Investment?

Given the total loss of 20% over three years, many shareholders in Fresh Del Monte Produce Inc are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

We compared total CEO remuneration at Fresh Del Monte Produce Inc with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

We think many shareholders would be underwhelmed with the business growth over the last three years.

Arguably worse, investors are without a positive return for the last three years. This analysis suggests to us that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Fresh Del Monte Produce.

Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.