Stock Analysis

We Discuss Whether Performance Food Group Company's (NYSE:PFGC) CEO Is Due For A Pay Rise

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Key Insights

  • Performance Food Group's Annual General Meeting to take place on 30th of November
  • Salary of US$1.17m is part of CEO George Holm's total remuneration
  • Total compensation is 39% below industry average
  • Over the past three years, Performance Food Group's EPS grew by 110% and over the past three years, the total shareholder return was 44%

Shareholders will be pleased by the impressive results for Performance Food Group Company (NYSE:PFGC) recently and CEO George Holm has played a key role. At the upcoming AGM on 30th of November, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

View our latest analysis for Performance Food Group

Comparing Performance Food Group Company's CEO Compensation With The Industry

According to our data, Performance Food Group Company has a market capitalization of US$9.8b, and paid its CEO total annual compensation worth US$9.5m over the year to July 2023. We note that's an increase of 9.5% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.2m.

On comparing similar companies in the American Consumer Retailing industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$16m. In other words, Performance Food Group pays its CEO lower than the industry median. What's more, George Holm holds US$142m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20232022Proportion (2023)
Salary US$1.2m US$1.1m 12%
Other US$8.3m US$7.6m 88%
Total CompensationUS$9.5m US$8.7m100%

On an industry level, roughly 12% of total compensation represents salary and 88% is other remuneration. Our data reveals that Performance Food Group allocates salary more or less in line with the wider market. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

NYSE:PFGC CEO Compensation November 24th 2023

Performance Food Group Company's Growth

Performance Food Group Company has seen its earnings per share (EPS) increase by 110% a year over the past three years. In the last year, its revenue is up 4.1%.

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. 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 Performance Food Group Company Been A Good Investment?

Most shareholders would probably be pleased with Performance Food Group Company for providing a total return of 44% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same 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. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Performance Food Group that investors should think about before committing capital to this stock.

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.

Valuation is complex, but we're helping make it simple.

Find out whether Performance Food Group is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

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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.