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Molly Hemmeter became the CEO of Landec Corporation (NASDAQ:LNDC) in 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Molly Hemmeter's Compensation Compare With Similar Sized Companies?
Our data indicates that Landec Corporation is worth US$316m, and total annual CEO compensation is US$1.3m. (This number is for the twelve months until May 2018). While we always look at total compensation first, we note that the salary component is less, at US$525k. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO total compensation was US$1.5m.
So Molly Hemmeter is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at Landec has changed over time.
Is Landec Corporation Growing?
Landec Corporation has increased its earnings per share (EPS) by an average of 85% a year, over the last three years (using a line of best fit). Its revenue is up 22% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Landec Corporation Been A Good Investment?
With a total shareholder return of 7.1% over three years, Landec Corporation has done okay by shareholders. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
Molly Hemmeter is paid around the same as most CEOs of similar size companies.
The company is growing EPS but shareholder returns have been sound but not amazing. So considering these factors, we think the CEO pay is probably quite reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Landec (free visualization of insider trades).
Important note: Landec 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 email@example.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.