Rob Vitale has been the CEO of Post Holdings, Inc. (NYSE:POST) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Post Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Rob Vitale Compare With Other Companies In The Industry?
According to our data, Post Holdings, Inc. has a market capitalization of US$6.0b, and paid its CEO total annual compensation worth US$11m over the year to September 2019. We note that's an increase of 15% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.4m.
On examining similar-sized companies in the industry with market capitalizations between US$4.0b and US$12b, we discovered that the median CEO total compensation of that group was US$7.8m. Accordingly, our analysis reveals that Post Holdings, Inc. pays Rob Vitale north of the industry median. Furthermore, Rob Vitale directly owns US$12m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, around 22% of total compensation represents salary and 78% is other remuneration. Post Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Post Holdings, Inc.'s Growth Numbers
Over the last three years, Post Holdings, Inc. has shrunk its earnings per share by 37% per year. In the last year, its revenue is down 2.3%.
The decline in earnings is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Post Holdings, Inc. Been A Good Investment?
Post Holdings, Inc. has not done too badly by shareholders, with a total return of 3.8%, over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
As previously discussed, Rob is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn't look great when you realize that the company has been suffering from negative earnings growth for the last three years. And while shareholder returns have been respectable, they have hardly been superb. So you may want to delve deeper, because we don't think the amount Rob makes is justifiable.
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 shouldn't be ignored) in Post Holdings we think you should know about.
Important note: Post Holdings 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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