The Simply Good Foods Company's (NASDAQ:SMPL) CEO Will Probably Have Their Compensation Approved By Shareholders

It would be hard to discount the role that CEO Joe Scalzo has played in delivering the impressive results at The Simply Good Foods Company (NASDAQ:SMPL) recently. Coming up to the next AGM on 19 January 2023, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

View our latest analysis for Simply Good Foods

Comparing The Simply Good Foods Company's CEO Compensation With The Industry

Our data indicates that The Simply Good Foods Company has a market capitalization of US$3.6b, and total annual CEO compensation was reported as US$4.3m for the year to August 2022. That's a notable decrease of 41% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$815k.

On examining similar-sized companies in the American Food industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$5.4m. This suggests that Simply Good Foods remunerates its CEO largely in line with the industry average. Moreover, Joe Scalzo also holds US$1.5m worth of Simply Good Foods stock directly under their own name.

Component	2022	2021	Proportion (2022)
Salary	US$815k	US$798k	19%
Other	US$3.5m	US$6.5m	81%
Total Compensation	US$4.3m	US$7.3m	100%

Talking in terms of the industry, salary represented approximately 25% of total compensation out of all the companies we analyzed, while other remuneration made up 75% of the pie. It's interesting to note that Simply Good Foods allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at The Simply Good Foods Company's Growth Numbers

Over the past three years, The Simply Good Foods Company has seen its earnings per share (EPS) grow by 59% per year. Its revenue is up 13% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 The Simply Good Foods Company Been A Good Investment?

We think that the total shareholder return of 44%, over three years, would leave most The Simply Good Foods Company shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Simply Good Foods.

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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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.