U.S. markets closed
  • S&P 500

    4,538.43
    -38.67 (-0.84%)
     
  • Dow 30

    34,580.08
    -59.71 (-0.17%)
     
  • Nasdaq

    15,085.47
    -295.85 (-1.92%)
     
  • Russell 2000

    2,159.31
    -47.02 (-2.13%)
     
  • Crude Oil

    66.22
    -0.28 (-0.42%)
     
  • Gold

    1,782.10
    +21.40 (+1.22%)
     
  • Silver

    22.45
    +0.17 (+0.76%)
     
  • EUR/USD

    1.1317
    +0.0012 (+0.10%)
     
  • 10-Yr Bond

    1.3430
    -0.1050 (-7.25%)
     
  • GBP/USD

    1.3235
    -0.0067 (-0.50%)
     
  • USD/JPY

    112.8000
    -0.4090 (-0.36%)
     
  • BTC-USD

    47,908.81
    -8,406.62 (-14.93%)
     
  • CMC Crypto 200

    1,367.14
    -74.62 (-5.18%)
     
  • FTSE 100

    7,122.32
    -6.89 (-0.10%)
     
  • Nikkei 225

    28,029.57
    +276.20 (+1.00%)
     

Does Simply Good Foods' (NASDAQ:SMPL) CEO Salary Compare Well With The Performance Of The Company?

  • Oops!
    Something went wrong.
    Please try again later.
·4 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

Joe Scalzo became the CEO of The Simply Good Foods Company (NASDAQ:SMPL) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Simply Good Foods.

View our latest analysis for Simply Good Foods

Comparing The Simply Good Foods Company's CEO Compensation With the industry

According to our data, The Simply Good Foods Company has a market capitalization of US$2.7b, and paid its CEO total annual compensation worth US$3.3m over the year to August 2020. We note that's a decrease of 11% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$751k.

In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$3.7m. So it looks like Simply Good Foods compensates Joe Scalzo in line with the median for the industry. What's more, Joe Scalzo holds US$11m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2020

2019

Proportion (2020)

Salary

US$751k

US$729k

23%

Other

US$2.5m

US$2.9m

77%

Total Compensation

US$3.3m

US$3.7m

100%

On an industry level, roughly 24% of total compensation represents salary and 76% is other remuneration. There isn't a significant difference between Simply Good Foods and the broader market, in terms of salary allocation in the overall compensation package. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

A Look at The Simply Good Foods Company's Growth Numbers

The Simply Good Foods Company has seen its earnings per share (EPS) increase by 128% a year over the past three years. In the last year, its revenue is up 62%.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 The Simply Good Foods Company Been A Good Investment?

We think that the total shareholder return of 106%, over three years, would leave most The Simply Good Foods 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...

As we noted earlier, Simply Good Foods pays its CEO in line with similar-sized companies belonging to the same industry. The company is growing EPS and total shareholder returns have been pleasing. Although the pay is close to the industry median, overall performance is excellent, so we don't think the CEO is paid too generously. Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.

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 3 warning signs for Simply Good Foods (of which 1 is a bit concerning!) 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.