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What We Learned About Hormel Foods' (NYSE:HRL) CEO Pay

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Simply Wall St
·3 min read
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This article will reflect on the compensation paid to Jim Snee who has served as CEO of Hormel Foods Corporation (NYSE:HRL) since 2016. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Hormel Foods

How Does Total Compensation For Jim Snee Compare With Other Companies In The Industry?

According to our data, Hormel Foods Corporation has a market capitalization of US$25b, and paid its CEO total annual compensation worth US$10m over the year to October 2020. That's a notable increase of 23% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$966k.

In comparison with other companies in the industry with market capitalizations over US$8.0b , the reported median total CEO compensation was US$13m. This suggests that Hormel Foods remunerates its CEO largely in line with the industry average. Moreover, Jim Snee also holds US$12m worth of Hormel Foods stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2020

2019

Proportion (2020)

Salary

US$966k

US$933k

9%

Other

US$9.3m

US$7.4m

91%

Total Compensation

US$10m

US$8.3m

100%

On an industry level, roughly 25% of total compensation represents salary and 75% is other remuneration. In Hormel Foods' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. 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 Hormel Foods Corporation's Growth Numbers

Over the past three years, Hormel Foods Corporation has seen its earnings per share (EPS) grow by 1.7% per year. It achieved revenue growth of 1.2% over the last year.

We're not particularly impressed by the revenue growth, but we're happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. 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 Hormel Foods Corporation Been A Good Investment?

Most shareholders would probably be pleased with Hormel Foods Corporation for providing a total return of 48% over three years. 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.

To Conclude...

As previously discussed, Jim is compensated close to the median for companies of its size, and which belong to the same industry. But the company has been found wanting in terms of EPS growth over the past three years. At the same time, shareholder returns have remained strong over the same period. So while shareholders shouldn't be overly concerned about CEO compensation, we suspect most would prefer to see improved performance, before a bump in pay.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Hormel Foods.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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.