Mohammad Abu-Ghazaleh has been the CEO of Fresh Del Monte Produce Inc. (NYSE:FDP) since 1996. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Mohammad Abu-Ghazaleh's Compensation Compare With Similar Sized Companies?
Our data indicates that Fresh Del Monte Produce Inc. is worth US$1.5b, and total annual CEO compensation is US$6.7m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$1.2m. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO total compensation was US$4.1m.
It would therefore appear that Fresh Del Monte Produce Inc. pays Mohammad Abu-Ghazaleh more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Fresh Del Monte Produce has changed from year to year.
Is Fresh Del Monte Produce Inc. Growing?
Fresh Del Monte Produce Inc. has reduced its earnings per share by an average of 70% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 5.3%.
Few shareholders would be pleased to read that earnings per share are lower over three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Fresh Del Monte Produce Inc. Been A Good Investment?
With a three year total loss of 46%, Fresh Del Monte Produce Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We examined the amount Fresh Del Monte Produce Inc. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
Just as bad, share price gains for investors have failed to materialize, over the same period. This analysis suggests to us that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Fresh Del Monte Produce.
Important note: Fresh Del Monte Produce 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.
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