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Is The J. M. Smucker Company's (NYSE:SJM) CEO Being Overpaid?

Simply Wall St

Mark Smucker has been the CEO of The J. M. Smucker Company (NYSE:SJM) since 2016. This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for J. M. Smucker

How Does Mark Smucker's Compensation Compare With Similar Sized Companies?

Our data indicates that The J. M. Smucker Company is worth US$13b, and total annual CEO compensation is US$8.1m. (This figure is for the year to April 2019). Notably, that's an increase of 19% over the year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$970k. We looked at a group of companies with market capitalizations over US$8.0b and the 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 Mark Smucker receives fairly typical remuneration for the CEO of a large company. 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.

You can see a visual representation of the CEO compensation at J. M. Smucker, below.

NYSE:SJM CEO Compensation, July 31st 2019

Is The J. M. Smucker Company Growing?

Over the last three years The J. M. Smucker Company has grown its earnings per share (EPS) by an average of 15% per year (using a line of best fit). It achieved revenue growth of 6.5% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.

Has The J. M. Smucker Company Been A Good Investment?

Since shareholders would have lost about 21% over three years, some The J. M. Smucker Company shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Mark Smucker is paid around the same as most CEOs of large companies.

We like that the company is growing EPS, but we cannot say the same about the lacklustre shareholder returns (over the last three years). We'd be surprised if shareholders want to see a pay rise for the CEO, but we'd stop short of calling their pay too generous. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at J. M. Smucker.

Important note: J. M. Smucker 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.