Stock Analysis

We Think Some Shareholders May Hesitate To Increase John B. Sanfilippo & Son, Inc.'s (NASDAQ:JBSS) CEO Compensation

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NasdaqGS:JBSS
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In the past three years, shareholders of John B. Sanfilippo & Son, Inc. (NASDAQ:JBSS) have seen a loss on their investment. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 03 November 2022 could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Our analysis indicates that JBSS is potentially undervalued!

How Does Total Compensation For Jeffrey Sanfilippo Compare With Other Companies In The Industry?

At the time of writing, our data shows that John B. Sanfilippo & Son, Inc. has a market capitalization of US$928m, and reported total annual CEO compensation of US$1.8m for the year to June 2022. That's a notable decrease of 49% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$764k.

For comparison, other companies in the same industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$2.3m. So it looks like John B. Sanfilippo & Son compensates Jeffrey Sanfilippo in line with the median for the industry. Furthermore, Jeffrey Sanfilippo directly owns US$8.7m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20222021Proportion (2022)
Salary US$764k US$685k 43%
Other US$1.0m US$2.8m 57%
Total CompensationUS$1.8m US$3.5m100%

On an industry level, around 23% of total compensation represents salary and 77% is other remuneration. It's interesting to note that John B. Sanfilippo & Son pays out a greater portion of remuneration through salary, compared to the industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
NasdaqGS:JBSS CEO Compensation October 28th 2022

A Look at John B. Sanfilippo & Son, Inc.'s Growth Numbers

John B. Sanfilippo & Son, Inc. has seen its earnings per share (EPS) increase by 16% a year over the past three years. In the last year, its revenue is up 11%.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has John B. Sanfilippo & Son, Inc. Been A Good Investment?

With a three year total loss of 11% for the shareholders, John B. Sanfilippo & Son, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 2 warning signs for John B. Sanfilippo & Son you should be aware of, and 1 of them is a bit concerning.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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Find out whether John B. Sanfilippo & Son 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.

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