We Think The Compensation For Seneca Foods Corporation's (NASDAQ:SENE.A) CEO Looks About Right

Key Insights

• Seneca Foods to hold its Annual General Meeting on 8th of August
• CEO Paul Palmby's total compensation includes salary of US$750.8k
• The total compensation is 38% less than the average for the industry
• Over the past three years, Seneca Foods' EPS fell by 13% and over the past three years, the total shareholder return was 15%

The performance at Seneca Foods Corporation (NASDAQ:SENE.A) has been rather lacklustre of late and shareholders may be wondering what CEO Paul Palmby is planning to do about this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 8th of August. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. In our opinion, CEO compensation does not look excessive and we discuss why.

Check out our latest analysis for Seneca Foods

How Does Total Compensation For Paul Palmby Compare With Other Companies In The Industry?

According to our data, Seneca Foods Corporation has a market capitalization of US$419m, and paid its CEO total annual compensation worth US$1.2m over the year to March 2024. That's a modest increase of 5.5% on the prior year. Notably, the salary which is US$750.8k, represents most of the total compensation being paid.

On examining similar-sized companies in the American Food industry with market capitalizations between US$200m and US$800m, we discovered that the median CEO total compensation of that group was US$1.9m. This suggests that Paul Palmby is paid below the industry median. Moreover, Paul Palmby also holds US$11m worth of Seneca Foods stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	US$751k	US$748k	63%
Other	US$444k	US$384k	37%
Total Compensation	US$1.2m	US$1.1m	100%

On an industry level, roughly 19% of total compensation represents salary and 81% is other remuneration. Seneca Foods is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Seneca Foods Corporation's Growth

Seneca Foods Corporation has reduced its earnings per share by 13% a year over the last three years. It saw its revenue drop 3.4% over the last year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Seneca Foods Corporation Been A Good Investment?

Seneca Foods Corporation has generated a total shareholder return of 15% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Shareholder returns while positive, need to be looked at along with earnings, which have failed to grow and this could mean that the current momentum may not continue. These are are some concerns that shareholders may want to address the board when they revisit their investment thesis.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Seneca 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com