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Mark Smucker became the CEO of The J. M. Smucker Company (NYSE:SJM) in 2016, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Mark Smucker Compare With Other Companies In The Industry?
According to our data, The J. M. Smucker Company has a market capitalization of US$13b, and paid its CEO total annual compensation worth US$11m over the year to April 2020. We note that's an increase of 33% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.
For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$13m. From this we gather that Mark Smucker is paid around the median for CEOs in the industry. What's more, Mark Smucker holds US$24m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 24% of total compensation represents salary, while the remainder of 76% is other remuneration. J. M. Smucker pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at The J. M. Smucker Company's Growth Numbers
The J. M. Smucker Company's earnings per share (EPS) grew 16% per year over the last three years. In the last year, its revenue is up 5.5%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has The J. M. Smucker Company Been A Good Investment?
With a total shareholder return of 8.3% over three years, The J. M. Smucker Company has done okay by shareholders. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
As we noted earlier, J. M. Smucker pays its CEO in line with similar-sized companies belonging to the same industry. But EPS growth over the last three years has been impressive, although the same cannot be said for shareholder returns. Considering overall performance, we'd say the compensation is fair, although stockholders will want to see higher returns moving forward.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 2 warning signs (and 1 which can't be ignored) in J. M. Smucker we think you should know about.
Switching gears from J. M. Smucker, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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