Here's Why Sysco Corporation's (NYSE:SYY) CEO Is Unlikely to Expect A Pay Rise This Year

Key Insights

• Sysco's Annual General Meeting to take place on 17th of November
• Total pay for CEO Kevin Hourican includes US$1.30m salary
• The overall pay is comparable to the industry average
• Sysco's total shareholder return over the past three years was 1.4% while its EPS grew by 74% over the past three years

Performance at Sysco Corporation (NYSE:SYY) has been reasonably good and CEO Kevin Hourican has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 17th of November, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Here is our take on why we think the CEO compensation looks appropriate.

See our latest analysis for Sysco

Comparing Sysco Corporation's CEO Compensation With The Industry

Our data indicates that Sysco Corporation has a market capitalization of US$34b, and total annual CEO compensation was reported as US$14m for the year to July 2023. That's a fairly small increase of 5.0% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.3m.

For comparison, other companies in the American Consumer Retailing industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$16m. From this we gather that Kevin Hourican is paid around the median for CEOs in the industry. Furthermore, Kevin Hourican directly owns US$5.7m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$1.3m	US$1.3m	9%
Other	US$13m	US$12m	91%
Total Compensation	US$14m	US$14m	100%

Talking in terms of the industry, salary represented approximately 12% of total compensation out of all the companies we analyzed, while other remuneration made up 88% of the pie. Sysco sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Sysco Corporation's Growth Numbers

Sysco Corporation's earnings per share (EPS) grew 74% per year over the last three years. In the last year, its revenue is up 7.8%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Sysco Corporation Been A Good Investment?

With a total shareholder return of 1.4% over three years, Sysco Corporation has done okay by shareholders, but there's always room for improvement. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

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. We did our research and spotted 1 warning sign for Sysco that investors should look into moving forward.

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.