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In 1989 Joe Sanderson was appointed CEO of Sanderson Farms, Inc. (NASDAQ:SAFM). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Joe Sanderson’s Compensation Compare With Similar Sized Companies?
According to our data, Sanderson Farms, Inc. has a market capitalization of US$3.3b, and pays its CEO total annual compensation worth US$4.2m. (This figure is for the year to October 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.5m. When we examined a selection of companies with market caps ranging from US$2.0b to US$6.4b, we found the median CEO total compensation was US$5.1m.
So Joe Sanderson receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
You can see a visual representation of the CEO compensation at Sanderson Farms, below.
Is Sanderson Farms, Inc. Growing?
Sanderson Farms, Inc. has reduced its earnings per share by an average of 8.5% a year, over the last three years (measured with a line of best fit). It saw its revenue drop -6.4% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Sanderson Farms, Inc. Been A Good Investment?
I think that the total shareholder return of 67%, over three years, would leave most Sanderson Farms, Inc. shareholders smiling. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
Remuneration for Joe Sanderson is close enough to the median pay for a CEO of a similar sized company .
We’re not seeing great strides in earnings per share, but the company has clearly pleased some investors, given the returns over the last three years. So we can’t see a reason to suggest the pay is inappropriate. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Sanderson Farms.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.