U.S. Markets open in 4 hrs 26 mins
  • S&P Futures

    4,171.00
    +13.25 (+0.32%)
     
  • Dow Futures

    34,334.00
    +78.00 (+0.23%)
     
  • Nasdaq Futures

    13,398.50
    +95.00 (+0.71%)
     
  • Russell 2000 Futures

    2,233.20
    +7.70 (+0.35%)
     
  • Crude Oil

    66.63
    +0.36 (+0.54%)
     
  • Gold

    1,869.60
    +2.00 (+0.11%)
     
  • Silver

    28.63
    +0.36 (+1.26%)
     
  • EUR/USD

    1.2220
    +0.0064 (+0.5255%)
     
  • 10-Yr Bond

    1.6400
    0.0000 (0.00%)
     
  • Vix

    19.24
    +0.43 (+2.29%)
     
  • GBP/USD

    1.4216
    +0.0078 (+0.5530%)
     
  • USD/JPY

    108.8830
    -0.3170 (-0.2903%)
     
  • BTC-USD

    44,842.20
    -339.07 (-0.75%)
     
  • CMC Crypto 200

    1,247.00
    +49.08 (+4.10%)
     
  • FTSE 100

    7,063.42
    +30.57 (+0.43%)
     
  • Nikkei 225

    28,406.84
    +582.01 (+2.09%)
     

Otter Tail Corporation's (NASDAQ:OTTR) CEO Compensation Is Looking A Bit Stretched At The Moment

  • Oops!
    Something went wrong.
    Please try again later.
Simply Wall St
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.

Under the guidance of CEO Chuck MacFarlane, Otter Tail Corporation (NASDAQ:OTTR) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 12 April 2021. However, some shareholders will still be cautious of paying the CEO excessively.

View our latest analysis for Otter Tail

Comparing Otter Tail Corporation's CEO Compensation With the industry

At the time of writing, our data shows that Otter Tail Corporation has a market capitalization of US$1.9b, and reported total annual CEO compensation of US$5.1m for the year to December 2020. Notably, that's a decrease of 11% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$680k.

In comparison with other companies in the industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$1.5m. Accordingly, our analysis reveals that Otter Tail Corporation pays Chuck MacFarlane north of the industry median. Furthermore, Chuck MacFarlane directly owns US$9.7m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2020

2019

Proportion (2020)

Salary

US$680k

US$700k

13%

Other

US$4.4m

US$5.1m

87%

Total Compensation

US$5.1m

US$5.8m

100%

On an industry level, around 13% of total compensation represents salary and 87% is other remuneration. Our data reveals that Otter Tail allocates salary more or less in line with the wider market. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

Otter Tail Corporation's Growth

Otter Tail Corporation's earnings per share (EPS) grew 8.6% per year over the last three years. Its revenue is down 3.2% over the previous year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest improvement in EPS is good. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Otter Tail Corporation Been A Good Investment?

Otter Tail Corporation has generated a total shareholder return of 17% 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...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for Otter Tail that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.