Sean Connolly has been the CEO of Conagra Brands, Inc. (NYSE:CAG) since 2015. First, this article will compare CEO compensation with compensation at other large companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Sean Connolly’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Conagra Brands, Inc. has a market cap of US$14b, and reported total annual CEO compensation of US$14m for the year to May 2019. While we always look at total compensation first, we note that the salary component is less, at US$1.2m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
Thus we can conclude that Sean Connolly receives more in total compensation than the median of a group of large companies in the same market as Conagra Brands, Inc.. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Conagra Brands has changed over time.
Is Conagra Brands, Inc. Growing?
Conagra Brands, Inc. has increased its earnings per share (EPS) by an average of 20% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 29%.
This shows that the company has improved itself over the last few years. Good news for shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Conagra Brands, Inc. Been A Good Investment?
Since shareholders would have lost about 22% over three years, some Conagra Brands, 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 Conagra Brands, Inc. pays its CEO, and compared it to the amount paid by other large companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. However, the returns to investors are far less impressive, over the same period. Considering the per share profit growth, but keeping in mind the weak returns, we’d need more time to form a view on CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling Conagra Brands shares (free trial).
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.
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.
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. Thank you for reading.