How Is Phibro Animal Health's (NASDAQ:PAHC) CEO Paid Relative To Peers?

Jack Bendheim has been the CEO of Phibro Animal Health Corporation (NASDAQ:PAHC) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Phibro Animal Health.

View our latest analysis for Phibro Animal Health

Comparing Phibro Animal Health Corporation's CEO Compensation With the industry

At the time of writing, our data shows that Phibro Animal Health Corporation has a market capitalization of US$694m, and reported total annual CEO compensation of US$3.0m for the year to June 2020. We note that's an increase of 11% above last year. In particular, the salary of US$2.13m, makes up a huge portion of the total compensation being paid to the CEO.

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$3.7m. From this we gather that Jack Bendheim is paid around the median for CEOs in the industry. What's more, Jack Bendheim holds US$347m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 24% of total compensation represents salary and 76% is other remuneration. It's interesting to note that Phibro Animal Health pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Phibro Animal Health Corporation's Growth

Over the last three years, Phibro Animal Health Corporation has shrunk its earnings per share by 20% per year. In the last year, its revenue is down 3.3%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Phibro Animal Health Corporation Been A Good Investment?

Since shareholders would have lost about 52% over three years, some Phibro Animal Health Corporation investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As previously discussed, Jack is compensated close to the median for companies of its size, and which belong to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

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 4 warning signs (and 1 which is a bit concerning) in Phibro Animal Health we think you should know about.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.