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This article will reflect on the compensation paid to Bob Jornayvaz who has served as CEO of Intrepid Potash, Inc. (NYSE:IPI) since 2014. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Bob Jornayvaz Compare With Other Companies In The Industry?
Our data indicates that Intrepid Potash, Inc. has a market capitalization of US$172m, and total annual CEO compensation was reported as US$2.7m for the year to December 2019. We note that's a decrease of 25% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$50k.
For comparison, other companies in the same industry with market capitalizations ranging between US$100m and US$400m had a median total CEO compensation of US$2.5m. So it looks like Intrepid Potash compensates Bob Jornayvaz in line with the median for the industry. What's more, Bob Jornayvaz holds US$27m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, around 19% of total compensation represents salary and 81% is other remuneration. A high-salary is usually a no-brainer when it comes to attracting the best executives, but Intrepid Potash paid Bob Jornayvaz a nominal salary to the CEO over the past 12 months, instead focusing on non-salary compensation. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Intrepid Potash, Inc.'s Growth
Intrepid Potash, Inc. has seen its earnings per share (EPS) increase by 43% a year over the past three years. Its revenue is down 15% over the previous year.
Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Intrepid Potash, Inc. Been A Good Investment?
With a three year total loss of 65% for the shareholders, Intrepid Potash, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
Intrepid Potash prefers rewarding its CEO through non-salary benefits. As we noted earlier, Intrepid Potash pays its CEO in line with similar-sized companies belonging to the same industry. At the same time, the company has logged negative shareholder returns over the last three years. However, EPS growth is positive over the same time frame. Overall, we wouldn't say Bob is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Intrepid Potash that investors should look into moving forward.
Switching gears from Intrepid Potash, 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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