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Is J & J Snack Foods Corp. (NASDAQ:JJSF) Overpaying Its CEO?

Simply Wall St

In 1971 Gerald Shreiber was appointed CEO of J & J Snack Foods Corp. (NASDAQ:JJSF). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for J & J Snack Foods

How Does Gerald Shreiber's Compensation Compare With Similar Sized Companies?

Our data indicates that J & J Snack Foods Corp. is worth US$3.6b, and total annual CEO compensation is US$3.9m. (This is based on the year to September 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$925k. We examined companies with market caps from US$2.0b to US$6.4b, and discovered that the median CEO total compensation of that group was US$5.1m.

That means Gerald Shreiber receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at J & J Snack Foods has changed from year to year.

NasdaqGS:JJSF CEO Compensation, August 16th 2019

Is J & J Snack Foods Corp. Growing?

J & J Snack Foods Corp. has increased its earnings per share (EPS) by an average of 8.7% a year, over the last three years (using a line of best fit). It achieved revenue growth of 1.8% over the last year.

I would argue that the improvement in revenue isn't particularly impressive, but it is good to see modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. You might want to check this free visual report on analyst forecasts for future earnings.

Has J & J Snack Foods Corp. Been A Good Investment?

I think that the total shareholder return of 64%, over three years, would leave most J & J Snack Foods Corp. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Gerald Shreiber is paid around what is normal the leaders of comparable size companies.

The company isn't showing particularly great growth, but shareholder returns have been pleasing. So considering most shareholders would be happy, we'd say the CEO pay is appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling J & J Snack Foods (free visualization of insider trades).

Important note: J & J Snack Foods 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.