Should You Worry About Nufarm Limited's (ASX:NUF) CEO Salary Level?

Simply Wall St

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Greg Hunt has been the CEO of Nufarm Limited (ASX:NUF) since 2015. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Nufarm

How Does Greg Hunt's Compensation Compare With Similar Sized Companies?

According to our data, Nufarm Limited has a market capitalization of AU$1.4b, and pays its CEO total annual compensation worth AU$1.9m. (This figure is for the year to July 2018). We think total compensation is more important but we note that the CEO salary is lower, at AU$1.3m. We looked at a group of companies with market capitalizations from AU$574m to AU$2.3b, and the median CEO total compensation was AU$1.5m.

So Greg Hunt is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see a visual representation of the CEO compensation at Nufarm, below.

ASX:NUF CEO Compensation, June 12th 2019

Is Nufarm Limited Growing?

Over the last three years Nufarm Limited has shrunk its earnings per share by an average of 3.4% per year (measured with a line of best fit). Its revenue is up 6.6% over last year.

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 Nufarm Limited Been A Good Investment?

Given the total loss of 46% over three years, many shareholders in Nufarm Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Greg Hunt is paid around what is normal the leaders of comparable size companies.

Returns have been disappointing and the company is not growing its earnings per share. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. Whatever your view on compensation, you might want to check if insiders are buying or selling Nufarm shares (free trial).

If you want to buy a stock that is better than Nufarm, this free list of high return, low debt companies is a great place to look.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.