Stock Analysis

Shareholders May Not Be So Generous With Limoneira Company's (NASDAQ:LMNR) CEO Compensation And Here's Why

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Key Insights

  • Limoneira will host its Annual General Meeting on 21st of March
  • Total pay for CEO Harold Edwards includes US$679.8k salary
  • The overall pay is 49% above the industry average
  • Over the past three years, Limoneira's EPS grew by 78% and over the past three years, the total shareholder return was 37%

Under the guidance of CEO Harold Edwards, Limoneira Company (NASDAQ:LMNR) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 21st of March. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Limoneira

Comparing Limoneira Company's CEO Compensation With The Industry

At the time of writing, our data shows that Limoneira Company has a market capitalization of US$297m, and reported total annual CEO compensation of US$2.0m for the year to October 2022. Notably, that's an increase of 52% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$680k.

For comparison, other companies in the American Food industry with market capitalizations ranging between US$100m and US$400m had a median total CEO compensation of US$1.3m. This suggests that Harold Edwards is paid more than the median for the industry. Moreover, Harold Edwards also holds US$4.0m worth of Limoneira stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20222021Proportion (2022)
Salary US$680k US$640k 34%
Other US$1.3m US$680k 66%
Total CompensationUS$2.0m US$1.3m100%

On an industry level, around 24% of total compensation represents salary and 76% is other remuneration. According to our research, Limoneira has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

NasdaqGS:LMNR CEO Compensation March 15th 2023

Limoneira Company's Growth

Limoneira Company's earnings per share (EPS) grew 78% per year over the last three years. Its revenue is up 9.7% 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. 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 Limoneira Company Been A Good Investment?

Boasting a total shareholder return of 37% over three years, Limoneira 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.

In Summary...

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. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 3 warning signs for Limoneira (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Important note: Limoneira is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

Valuation is complex, but we're helping make it simple.

Find out whether Limoneira 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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