Jonathan Ferrari became the CEO of Goodfood Market Corp. (TSE:FOOD) in 2014, 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 assess whether Goodfood Market pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Goodfood Market Corp.'s CEO Compensation With the industry
At the time of writing, our data shows that Goodfood Market Corp. has a market capitalization of CA$844m, and reported total annual CEO compensation of CA$770k for the year to August 2020. That's a notable decrease of 42% on last year. Notably, the salary which is CA$385.0k, represents most of the total compensation being paid.
For comparison, other companies in the same industry with market capitalizations ranging between CA$510m and CA$2.0b had a median total CEO compensation of CA$2.4m. This suggests that Jonathan Ferrari is paid below the industry median. What's more, Jonathan Ferrari holds CA$122m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Talking in terms of the industry, salary represented approximately 99% of total compensation out of all the companies we analyzed, while other remuneration made up 1.2% of the pie. Goodfood Market sets aside a smaller share of compensation for salary, in comparison to the overall industry.
A Look at Goodfood Market Corp.'s Growth Numbers
Over the past three years, Goodfood Market Corp. has seen its earnings per share (EPS) grow by 4.4% per year. It achieved revenue growth of 77% over the last year.
It's great to see that revenue growth is strong. With that in mind, the modestly improving EPS seems positive. So while we'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! 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 Goodfood Market Corp. Been A Good Investment?
Most shareholders would probably be pleased with Goodfood Market Corp. for providing a total return of 319% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
As previously discussed, Jonathan is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. On the other hand, shareholder returns have been have been very pleasing, over the last three years, and that should put a smile on the faces of investors. As a result of the juicy return to investors, CEO compensation may well be quite reasonable.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 1 which shouldn't be ignored) in Goodfood Market we think you should know about.
Important note: Goodfood Market 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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