We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Performance Food Group Company's (NYSE:PFGC) CEO For Now

By
Simply Wall St
Published
November 11, 2021
NYSE:PFGC
Source: Shutterstock

CEO George Holm has done a decent job of delivering relatively good performance at Performance Food Group Company (NYSE:PFGC) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 18 November 2021. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Performance Food Group

How Does Total Compensation For George Holm Compare With Other Companies In The Industry?

At the time of writing, our data shows that Performance Food Group Company has a market capitalization of US$7.4b, and reported total annual CEO compensation of US$8.2m for the year to July 2021. Notably, that's an increase of 33% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.0m.

For comparison, other companies in the same industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$6.0m. Hence, we can conclude that George Holm is remunerated higher than the industry median. What's more, George Holm holds US$109m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20212020Proportion (2021)
Salary US$1.0m US$1.0m 12%
Other US$7.2m US$5.2m 88%
Total CompensationUS$8.2m US$6.2m100%

On an industry level, around 15% of total compensation represents salary and 85% is other remuneration. Performance Food Group pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
NYSE:PFGC CEO Compensation November 12th 2021

A Look at Performance Food Group Company's Growth Numbers

Performance Food Group Company has reduced its earnings per share by 47% a year over the last three years. In the last year, its revenue is up 30%.

The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Performance Food Group Company Been A Good Investment?

Boasting a total shareholder return of 44% over three years, Performance Food Group Company has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Although the company has performed relatively well, we still think there are some areas that could be improved. We still think that some shareholders will be hesitant of increasing CEO pay until EPS growth improves, since they are already paid higher than the industry.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 1 which is potentially serious) in Performance Food Group 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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