This article will reflect on the compensation paid to Sean Connolly who has served as CEO of Conagra Brands, Inc. (NYSE:CAG) since 2015. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Conagra Brands.
Comparing Conagra Brands, Inc.'s CEO Compensation With the industry
Our data indicates that Conagra Brands, Inc. has a market capitalization of US$17b, and total annual CEO compensation was reported as US$12m for the year to May 2020. Notably, that's a decrease of 17% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.2m.
For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$12m. This suggests that Conagra Brands remunerates its CEO largely in line with the industry average. Moreover, Sean Connolly also holds US$18m worth of Conagra Brands stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, around 22% of total compensation represents salary and 78% is other remuneration. Conagra Brands pays a modest slice of remuneration through salary, as compared to the broader 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 Conagra Brands, Inc.'s Growth Numbers
Conagra Brands, Inc.'s earnings per share (EPS) grew 12% per year over the last three years. Its revenue is up 15% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Conagra Brands, Inc. Been A Good Investment?
With a total shareholder return of 13% over three years, Conagra Brands, Inc. shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
As we touched on above, Conagra Brands, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But EPS growth for the company has been strong over the last three years, though shareholder returns in comparison haven't been as impressive. So considering these factors, we think the compensation is probably quite reasonable, but investor returns need a boost moving forward.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 4 warning signs for Conagra Brands (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the 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.
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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