Yahoo Finance Shareholders Will Probably Hold Off On Increasing Green Plains Inc.'s (NASDAQ:GPRE) CEO Compensation For The Time Being
Key Insights
Green Plains will host its Annual General Meeting on 7th of May
CEO Todd Becker's total compensation includes salary of US$800.0k
The total compensation is similar to the average for the industry
Over the past three years, Green Plains' EPS grew by 2.9% and over the past three years, the total loss to shareholders 33%
Shareholders of Green Plains Inc. (NASDAQ:GPRE) will have been dismayed by the negative share price return over the last three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 7th of May. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.
Check out our latest analysis for Green Plains
How Does Total Compensation For Todd Becker Compare With Other Companies In The Industry?
At the time of writing, our data shows that Green Plains Inc. has a market capitalization of US$1.3b, and reported total annual CEO compensation of US$5.8m for the year to December 2023. This means that the compensation hasn't changed much from last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$800k.
On examining similar-sized companies in the American Oil and Gas industry with market capitalizations between US$1.0b and US$3.2b, we discovered that the median CEO total compensation of that group was US$5.9m. So it looks like Green Plains compensates Todd Becker in line with the median for the industry. Furthermore, Todd Becker directly owns US$16m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$800k | US$800k | 14% |
Other | US$5.0m | US$5.1m | 86% |
Total Compensation | US$5.8m | US$5.9m | 100% |
Speaking on an industry level, nearly 13% of total compensation represents salary, while the remainder of 87% is other remuneration. Green Plains is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Green Plains Inc.'s Growth Numbers
Over the past three years, Green Plains Inc. has seen its earnings per share (EPS) grow by 2.9% per year. In the last year, its revenue is down 10%.
We would prefer it if there was revenue growth, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Green Plains Inc. Been A Good Investment?
With a total shareholder return of -33% over three years, Green Plains Inc. shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
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 Green Plains that investors should look into moving forward.
Important note: Green Plains is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
