Shareholders Will Probably Hold Off On Increasing J&J Snack Foods Corp.'s (NASDAQ:JJSF) CEO Compensation For The Time Being

Key Insights

• J&J Snack Foods will host its Annual General Meeting on 13th of February
• Total pay for CEO Dan Fachner includes US$936.5k salary
• The total compensation is similar to the average for the industry
• J&J Snack Foods' three-year loss to shareholders was 4.2% while its EPS grew by 195% over the past three years

As many shareholders of J&J Snack Foods Corp. (NASDAQ:JJSF) will be aware, they have not made a gain on their investment in the past three years. 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 13th of February could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for J&J Snack Foods

How Does Total Compensation For Dan Fachner Compare With Other Companies In The Industry?

According to our data, J&J Snack Foods Corp. has a market capitalization of US$2.8b, and paid its CEO total annual compensation worth US$4.6m over the year to September 2023. We note that's an increase of 50% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$937k.

In comparison with other companies in the American Food industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$5.0m. This suggests that J&J Snack Foods remunerates its CEO largely in line with the industry average. Moreover, Dan Fachner also holds US$3.2m worth of J&J Snack Foods stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$937k	US$896k	20%
Other	US$3.6m	US$2.2m	80%
Total Compensation	US$4.6m	US$3.0m	100%

On an industry level, roughly 28% of total compensation represents salary and 72% is other remuneration. In J&J Snack Foods' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

J&J Snack Foods Corp.'s Growth

J&J Snack Foods Corp. has seen its earnings per share (EPS) increase by 195% a year over the past three years. It achieved revenue growth of 9.8% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 J&J Snack Foods Corp. Been A Good Investment?

Given the total shareholder loss of 4.2% over three years, many shareholders in J&J Snack Foods Corp. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for J&J Snack Foods 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.