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In 2008 Steve Spinner was appointed CEO of United Natural Foods, Inc. (NYSE:UNFI). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Steve Spinner's Compensation Compare With Similar Sized Companies?
Our data indicates that United Natural Foods, Inc. is worth US$495m, and total annual CEO compensation is US$5.1m. (This figure is for the year to July 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$942k. We looked at a group of companies with market capitalizations from US$200m to US$800m, and the median CEO total compensation was US$1.7m.
As you can see, Steve Spinner is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean United Natural Foods, Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at United Natural Foods has changed over time.
Is United Natural Foods, Inc. Growing?
On average over the last three years, United Natural Foods, Inc. has shrunk earnings per share by 62% each year (measured with a line of best fit). Its revenue is up 76% over last year.
Investors should note that, over three years, earnings per share are down. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. It could be important to check this free visual depiction of what analysts expect for the future.
Has United Natural Foods, Inc. Been A Good Investment?
Since shareholders would have lost about 80% over three years, some United Natural Foods, Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
We examined the amount United Natural Foods, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Although we'd stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. So you may want to check if insiders are buying United Natural Foods shares with their own money (free access).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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 firstname.lastname@example.org. 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.