What Can We Conclude About John B. Sanfilippo & Son's (NASDAQ:JBSS) CEO Pay?
This article will reflect on the compensation paid to Jeffrey Sanfilippo who has served as CEO of John B. Sanfilippo & Son, Inc. (NASDAQ:JBSS) since 2006. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
See our latest analysis for John B. Sanfilippo & Son
Comparing John B. Sanfilippo & Son, Inc.'s CEO Compensation With the industry
Our data indicates that John B. Sanfilippo & Son, Inc. has a market capitalization of US$852m, and total annual CEO compensation was reported as US$3.6m for the year to June 2020. That's a notable increase of 37% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$643k.
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$1.3m. Accordingly, our analysis reveals that John B. Sanfilippo & Son, Inc. pays Jeffrey Sanfilippo north of the industry median. Furthermore, Jeffrey Sanfilippo directly owns US$7.8m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$643k | US$585k | 18% |
Other | US$3.0m | US$2.0m | 82% |
Total Compensation | US$3.6m | US$2.6m | 100% |
On an industry level, around 24% of total compensation represents salary and 76% is other remuneration. It's interesting to note that John B. Sanfilippo & Son allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
John B. Sanfilippo & Son, Inc.'s Growth
John B. Sanfilippo & Son, Inc. has seen its earnings per share (EPS) increase by 13% a year over the past three years. It saw its revenue drop 1.9% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 John B. Sanfilippo & Son, Inc. Been A Good Investment?
Boasting a total shareholder return of 39% over three years, John B. Sanfilippo & Son, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
As we noted earlier, John B. Sanfilippo & Son pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. Considering such exceptional results for the company, we'd venture to say CEO compensation is fair. And given most shareholders are probably very happy with recent returns, they might even think that Jeffrey deserves a raise!
CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for John B. Sanfilippo & Son (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from John B. Sanfilippo & Son, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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