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Pat Bowe became the CEO of The Andersons, Inc. (NASDAQ:ANDE) in 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 method should give us information to assess how appropriately the company pays the CEO.
How Does Pat Bowe's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that The Andersons, Inc. has a market cap of US$886m, and is paying total annual CEO compensation of US$3.9m. (This figure is for the year to December 2018). Notably, that's an increase of 11% over the year before. We think total compensation is more important but we note that the CEO salary is lower, at US$923k. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$2.7m.
Thus we can conclude that Pat Bowe receives more in total compensation than the median of a group of companies in the same market, and of similar size to The Andersons, Inc.. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Andersons has changed over time.
Is The Andersons, Inc. Growing?
Over the last three years The Andersons, Inc. has grown its earnings per share (EPS) by an average of 91% per year (using a line of best fit). Its revenue is up 26% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. You might want to check this free visual report on analyst forecasts for future earnings.
Has The Andersons, Inc. Been A Good Investment?
Given the total loss of 15% over three years, many shareholders in The Andersons, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We examined the amount The Andersons, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. This contrasts with the growth in CEO remuneration, in the last year. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. Whatever your view on compensation, you might want to check if insiders are buying or selling Andersons shares (free trial).
Important note: Andersons may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.