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Does The Hershey Company's (NYSE:HSY) CEO Pay Reflect Performance?

Simply Wall St

Michele Buck became the CEO of The Hershey Company (NYSE:HSY) in 2017. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Hershey

How Does Michele Buck's Compensation Compare With Similar Sized Companies?

Our data indicates that The Hershey Company is worth US$33b, and total annual CEO compensation is US$12m. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$1.1m. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

That means Michele Buck receives fairly typical remuneration for the CEO of a large company. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

You can see, below, how CEO compensation at Hershey has changed over time.

NYSE:HSY CEO Compensation, September 8th 2019

Is The Hershey Company Growing?

On average over the last three years, The Hershey Company has grown earnings per share (EPS) by 22% each year (using a line of best fit). In the last year, its revenue is up 2.0%.

This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. You might want to check this free visual report on analyst forecasts for future earnings.

Has The Hershey Company Been A Good Investment?

I think that the total shareholder return of 78%, over three years, would leave most The Hershey Company shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Michele Buck is paid around what is normal the leaders of larger companies.

The company is growing earnings per share and total shareholder returns have been pleasing. Indeed, many might consider the pay rather modest, given the solid company performance! Shareholders may want to check for free if Hershey insiders are buying or selling shares.

Important note: Hershey may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.