Dolph Baker became the CEO of Cal-Maine Foods, Inc. (NASDAQ:CALM) in 2010. First, this article will compare CEO compensation with compensation at similar sized companies. 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 process should give us an idea about how appropriately the CEO is paid.
How Does Dolph Baker's Compensation Compare With Similar Sized Companies?
Our data indicates that Cal-Maine Foods, Inc. is worth US$2.1b, and total annual CEO compensation was reported as US$1.3m for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at US$426k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$3.9m.
Most shareholders would consider it a positive that Dolph Baker takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at Cal-Maine Foods has changed from year to year.
Is Cal-Maine Foods, Inc. Growing?
Cal-Maine Foods, Inc. has increased its earnings per share (EPS) by an average of 40% a year, over the last three years (using a line of best fit). Its revenue is down 20% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Cal-Maine Foods, Inc. Been A Good Investment?
Since shareholders would have lost about 0.8% over three years, some Cal-Maine Foods, Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
Cal-Maine Foods, Inc. is currently paying its CEO below what is normal for companies of its size.
Considering the underlying business is growing earnings, this would suggest the pay is modest. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. So while we don't think, Dolph Baker is paid too much, shareholders may hope that business performance translates to investment returns before pay rises are given out. When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. So you may want to check if insiders are buying Cal-Maine Foods shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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