We Think The Chefs' Warehouse, Inc.'s (NASDAQ:CHEF) CEO Compensation Looks Fair

Key Insights

• Chefs' Warehouse's Annual General Meeting to take place on 9th of May
• CEO Chris Pappas' total compensation includes salary of US$1.12m
• The overall pay is comparable to the industry average
• Chefs' Warehouse's total shareholder return over the past three years was 59% while its EPS grew by 59% over the past three years

Our free stock report includes 2 warning signs investors should be aware of before investing in Chefs' Warehouse. Read for free now.

The performance at The Chefs' Warehouse, Inc. (NASDAQ:CHEF) has been quite strong recently and CEO Chris Pappas has played a role in it. Coming up to the next AGM on 9th of May, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

View our latest analysis for Chefs' Warehouse

How Does Total Compensation For Chris Pappas Compare With Other Companies In The Industry?

Our data indicates that The Chefs' Warehouse, Inc. has a market capitalization of US$2.3b, and total annual CEO compensation was reported as US$5.8m for the year to December 2024. Notably, that's an increase of 15% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.1m.

On examining similar-sized companies in the American Consumer Retailing industry with market capitalizations between US$1.0b and US$3.2b, we discovered that the median CEO total compensation of that group was US$5.3m. So it looks like Chefs' Warehouse compensates Chris Pappas in line with the median for the industry. Furthermore, Chris Pappas directly owns US$157m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	US$1.1m	US$1.0m	19%
Other	US$4.7m	US$4.0m	81%
Total Compensation	US$5.8m	US$5.0m	100%

Talking in terms of the industry, salary represented approximately 19% of total compensation out of all the companies we analyzed, while other remuneration made up 81% of the pie. There isn't a significant difference between Chefs' Warehouse and the broader market, in terms of salary allocation in the overall compensation package. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at The Chefs' Warehouse, Inc.'s Growth Numbers

Over the past three years, The Chefs' Warehouse, Inc. has seen its earnings per share (EPS) grow by 59% per year. In the last year, its revenue is up 7.9%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has The Chefs' Warehouse, Inc. Been A Good Investment?

Boasting a total shareholder return of 59% over three years, The Chefs' Warehouse, Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which shouldn't be ignored) in Chefs' Warehouse 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. 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.