Most Shareholders Will Probably Find That The CEO Compensation For Darden Restaurants, Inc. (NYSE:DRI) Is Reasonable

Key Insights

• Darden Restaurants will host its Annual General Meeting on 18th of September
• Total pay for CEO Rick Cardenas includes US$1.08m salary
• The total compensation is similar to the average for the industry
• Over the past three years, Darden Restaurants' EPS grew by 21% and over the past three years, the total shareholder return was 17%

Under the guidance of CEO Rick Cardenas, Darden Restaurants, Inc. (NYSE:DRI) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 18th of September. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

View our latest analysis for Darden Restaurants

How Does Total Compensation For Rick Cardenas Compare With Other Companies In The Industry?

At the time of writing, our data shows that Darden Restaurants, Inc. has a market capitalization of US$19b, and reported total annual CEO compensation of US$12m for the year to May 2024. That's a notable increase of 41% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.1m.

For comparison, other companies in the American Hospitality industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$13m. This suggests that Darden Restaurants remunerates its CEO largely in line with the industry average. Furthermore, Rick Cardenas directly owns US$9.7m 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	9%
Other	US$11m	US$7.5m	91%
Total Compensation	US$12m	US$8.5m	100%

On an industry level, around 18% of total compensation represents salary and 82% is other remuneration. In Darden Restaurants' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Darden Restaurants, Inc.'s Growth

Over the past three years, Darden Restaurants, Inc. has seen its earnings per share (EPS) grow by 21% per year. It achieved revenue growth of 8.6% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Darden Restaurants, Inc. Been A Good Investment?

Darden Restaurants, Inc. has served shareholders reasonably well, with a total return of 17% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

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've identified 3 warning signs for Darden Restaurants that investors should be aware of in a dynamic business environment.

Switching gears from Darden Restaurants, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.