Dennis Eidson became the CEO of SpartanNash Company (NASDAQ:SPTN) in 2008. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Dennis Eidson's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that SpartanNash Company has a market cap of US$612m, and reported total annual CEO compensation of US$3.5m for the year to December 2019. That's a notable increase of 1145% on last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$538k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from US$400m to US$1.6b, and the median CEO total compensation was US$3.4m.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of SpartanNash. On an industry level, roughly 16% of total compensation represents salary and 84% is other remuneration. So it seems like there isn't a significant difference between SpartanNash and the broader market, in terms of salary allocation in the overall compensation package.
So Dennis Eidson receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context. You can see a visual representation of the CEO compensation at SpartanNash, below.
Is SpartanNash Company Growing?
On average over the last three years, SpartanNash Company has shrunk earnings per share by 14% each year (measured with a line of best fit). Its revenue is up 5.8% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has SpartanNash Company Been A Good Investment?
Given the total loss of 45% over three years, many shareholders in SpartanNash Company are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
Dennis Eidson is paid around what is normal for the leaders of comparable size companies.
Returns have been disappointing and the company is not growing its earnings per share. So shareholders might not feel great about the fact that CEO pay increased on last year. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. On another note, SpartanNash has 5 warning signs (and 1 which is significant) we think you should know about.
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.
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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. Thank you for reading.