We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Limoneira Company's (NASDAQ:LMNR) CEO For Now
Key Insights
Limoneira to hold its Annual General Meeting on 21st of March
CEO Harold Edwards' total compensation includes salary of US$679.8k
The overall pay is 49% above the industry average
Limoneira's EPS grew by 78% over the past three years while total shareholder return over the past three years was 37%
CEO Harold Edwards has done a decent job of delivering relatively good performance at Limoneira Company (NASDAQ:LMNR) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 21st of March. However, some shareholders will still be cautious of paying the CEO excessively.
View our latest analysis for Limoneira
Comparing Limoneira Company's CEO Compensation With The Industry
Our data indicates that Limoneira Company has a market capitalization of US$297m, and total annual CEO compensation was reported as US$2.0m for the year to October 2022. We note that's an increase of 52% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$680k.
On examining similar-sized companies in the American Food industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$1.3m. Hence, we can conclude that Harold Edwards is remunerated higher than the industry median. Furthermore, Harold Edwards directly owns US$4.0m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2022 | 2021 | Proportion (2022) |
Salary | US$680k | US$640k | 34% |
Other | US$1.3m | US$680k | 66% |
Total Compensation | US$2.0m | US$1.3m | 100% |
On an industry level, around 24% of total compensation represents salary and 76% is other remuneration. Limoneira pays out 34% of remuneration in the form of a salary, significantly higher than the industry average. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Limoneira Company's Growth
Limoneira Company has seen its earnings per share (EPS) increase by 78% a year over the past three years. Its revenue is up 9.7% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Limoneira Company Been A Good Investment?
Most shareholders would probably be pleased with Limoneira Company for providing a total return of 37% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.
CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for Limoneira (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.
Important note: Limoneira is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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