How Much Is Ferro's (NYSE:FOE) CEO Getting Paid?

This article will reflect on the compensation paid to Peter Thomas who has served as CEO of Ferro Corporation (NYSE:FOE) since 2013. This analysis will also assess whether Ferro pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Ferro

How Does Total Compensation For Peter Thomas Compare With Other Companies In The Industry?

According to our data, Ferro Corporation has a market capitalization of US$1.0b, and paid its CEO total annual compensation worth US$5.0m over the year to December 2019. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$969k.

On examining similar-sized companies in the industry with market capitalizations between US$400m and US$1.6b, we discovered that the median CEO total compensation of that group was US$3.8m. This suggests that Ferro remunerates its CEO largely in line with the industry average. Moreover, Peter Thomas also holds US$9.9m worth of Ferro stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 19% of total compensation represents salary, while the remainder of 81% is other remuneration. There isn't a significant difference between Ferro and the broader market, in terms of salary allocation in the overall compensation package. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Ferro Corporation's Growth

Ferro Corporation has reduced its earnings per share by 12% a year over the last three years. In the last year, its revenue is up 21%.

The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Ferro Corporation Been A Good Investment?

Given the total shareholder loss of 41% over three years, many shareholders in Ferro Corporation are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As previously discussed, Peter is compensated close to the median for companies of its size, and which belong to the same industry. Still, the company is logging healthy revenue growth over the last year. On the other hand, shareholder returns for Peter are negative over the same period. EPS growth is also negative, adding insult to injury. We'd say CEO compensation isn't unfair, but shareholders may be wary of a bump in pay before the company substantially improves overall performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 2 warning signs (and 1 which is potentially serious) in Ferro we think you should know about.

Important note: Ferro 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.

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.

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