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Shareholders will probably not be too impressed with the underwhelming results at The Andersons, Inc. (NASDAQ:ANDE) recently. At the upcoming AGM on 07 May 2021, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.
View our latest analysis for Andersons
Comparing The Andersons, Inc.'s CEO Compensation With the industry
Our data indicates that The Andersons, Inc. has a market capitalization of US$953m, and total annual CEO compensation was reported as US$3.8m for the year to December 2020. That's a notable decrease of 13% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$997k.
For comparison, other companies in the same industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$3.8m. From this we gather that Pat Bowe is paid around the median for CEOs in the industry. What's more, Pat Bowe holds US$5.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | US$997k | US$953k | 27% |
| Other | US$2.8m | US$3.4m | 73% |
| Total Compensation | US$3.8m | US$4.3m | 100% |
On an industry level, roughly 15% of total compensation represents salary and 85% is other remuneration. It's interesting to note that Andersons pays out a greater portion of remuneration through salary, compared to the industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
The Andersons, Inc.'s Growth
Over the last three years, The Andersons, Inc. has shrunk its earnings per share by 46% per year. The trailing twelve months of revenue was pretty much the same as the prior period.
Few shareholders would be pleased to read that EPS have declined. And the flat revenue is seriously uninspiring. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 The Andersons, Inc. Been A Good Investment?
With a three year total loss of 5.4% for the shareholders, The Andersons, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.