Is Freshpet, Inc.'s (NASDAQ:FRPT) CEO Paid At A Competitive Rate?
Billy Cyr became the CEO of Freshpet, Inc. (NASDAQ:FRPT) in 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Freshpet
How Does Billy Cyr's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Freshpet, Inc. has a market cap of US$1.8b, and reported total annual CEO compensation of US$1.2m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$600k. 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.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at Freshpet, below.
Is Freshpet, Inc. Growing?
Freshpet, Inc. has reduced its earnings per share by an average of 25% a year, over the last three years (measured with a line of best fit). Its revenue is up 27% over last year.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. Shareholders might be interested in this free visualization of analyst forecasts.
Has Freshpet, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Freshpet, Inc. for providing a total return of 494% 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.
In Summary...
Freshpet, Inc. is currently paying its CEO below what is normal for companies of its size.
It's well worth noting that while Billy Cyr is paid below what is normal at companies of similar size, the returns have been very pleasing, over the last three years. Although we could see higher growth, we'd argue the remuneration is modest, based on these observations. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Freshpet (free visualization of insider trades).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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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.
