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This article will reflect on the compensation paid to Steve Oakland who has served as CEO of TreeHouse Foods, Inc. (NYSE:THS) since 2018. This analysis will also assess whether TreeHouse Foods pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing TreeHouse Foods, Inc.'s CEO Compensation With the industry
Our data indicates that TreeHouse Foods, Inc. has a market capitalization of US$2.4b, and total annual CEO compensation was reported as US$7.2m for the year to December 2019. Notably, that's a decrease of 33% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.0m.
On comparing similar companies from the same industry with market caps ranging from US$2.0b to US$6.4b, we found that the median CEO total compensation was US$3.7m. This suggests that Steve Oakland is paid more than the median for the industry. What's more, Steve Oakland holds US$1.8m worth of shares in the company in their own name.
On an industry level, roughly 24% of total compensation represents salary and 76% is other remuneration. It's interesting to note that TreeHouse Foods allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at TreeHouse Foods, Inc.'s Growth Numbers
Over the past three years, TreeHouse Foods, Inc. has seen its earnings per share (EPS) grow by 36% per year. In the last year, its revenue changed by just 0.7%.
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. 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 TreeHouse Foods, Inc. Been A Good Investment?
Since shareholders would have lost about 14% over three years, some TreeHouse Foods, Inc. investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
As we noted earlier, TreeHouse Foods pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But the company has impressed with its EPS growth, but shareholder returns — over the same period — have been disappointing. Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for TreeHouse Foods that investors should be aware of in a dynamic business environment.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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.
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