Yahoo Finance Increases to Darling Ingredients Inc.'s (NYSE:DAR) CEO Compensation Might Cool off for now
Key Insights
Darling Ingredients to hold its Annual General Meeting on 7th of May
CEO Randy Stuewe's total compensation includes salary of US$1.26m
The total compensation is 46% higher than the average for the industry
Darling Ingredients' three-year loss to shareholders was 41% while its EPS grew by 15% over the past three years
In the past three years, the share price of Darling Ingredients Inc. (NYSE:DAR) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 7th of May. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.
Check out our latest analysis for Darling Ingredients
How Does Total Compensation For Randy Stuewe Compare With Other Companies In The Industry?
At the time of writing, our data shows that Darling Ingredients Inc. has a market capitalization of US$6.8b, and reported total annual CEO compensation of US$9.3m for the year to December 2023. That's a fairly small increase of 7.8% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.3m.
For comparison, other companies in the American Food industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$6.4m. This suggests that Randy Stuewe is paid more than the median for the industry. Moreover, Randy Stuewe also holds US$28m worth of Darling Ingredients stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.3m | US$1.2m | 14% |
Other | US$8.1m | US$7.5m | 86% |
Total Compensation | US$9.3m | US$8.7m | 100% |
Speaking on an industry level, nearly 22% of total compensation represents salary, while the remainder of 78% is other remuneration. In Darling Ingredients' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Darling Ingredients Inc.'s Growth
Darling Ingredients Inc. has seen its earnings per share (EPS) increase by 15% a year over the past three years. In the last year, its revenue is down 7.6%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Darling Ingredients Inc. Been A Good Investment?
The return of -41% over three years would not have pleased Darling Ingredients Inc. shareholders. 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 fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Darling Ingredients that investors should think about before committing capital to this stock.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.
