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This article will reflect on the compensation paid to Pat Bowe who has served as CEO of The Andersons, Inc. (NASDAQ:ANDE) since 2015. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Andersons.
How Does Total Compensation For Pat Bowe Compare With Other Companies In The Industry?
At the time of writing, our data shows that The Andersons, Inc. has a market capitalization of US$423m, and reported total annual CEO compensation of US$4.3m for the year to December 2019. That's a notable increase of 11% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$953k.
For comparison, other companies in the same industry with market capitalizations ranging between US$200m and US$800m had a median total CEO compensation of US$3.2m. This suggests that Pat Bowe is paid more than the median for the industry. What's more, Pat Bowe holds US$2.3m worth of shares in the company in their own name.
On an industry level, roughly 16% of total compensation represents salary and 84% is other remuneration. Andersons pays out 22% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
The Andersons, Inc.'s Growth
Over the past three years, The Andersons, Inc. has seen its earnings per share (EPS) grow by 5.3% per year. It achieved revenue growth of 83% over the last year.
We like the look of the strong year-on-year improvement in revenue. And in that context, the modest EPS improvement certainly isn't shabby. We'd stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has The Andersons, Inc. Been A Good Investment?
With a three year total loss of 58% for the shareholders, The Andersons, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
As previously discussed, Pat is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. While we have not been overly impressed by the business performance, the shareholder returns have been utterly depressing, over the last three years. And the situation doesn't look all that good when you see Pat is remunerated higher than the industry average. All things considered, we believe shareholders would be disappointed to see Pat's compensation grow without first seeing an improvement in the performance of the company.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 3 warning signs (and 1 which can't be ignored) in Andersons we think you should know about.
Switching gears from Andersons, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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