Stock Analysis

Here's Why Shareholders Should Examine Conagra Brands, Inc.'s (NYSE:CAG) CEO Compensation Package More Closely

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Key Insights

  • Conagra Brands will host its Annual General Meeting on 14th of September
  • Total pay for CEO Sean Connolly includes US$1.32m salary
  • Total compensation is 41% above industry average
  • Over the past three years, Conagra Brands' EPS fell by 6.0% and over the past three years, the total loss to shareholders 6.8%

Conagra Brands, Inc. (NYSE:CAG) has not performed well recently and CEO Sean Connolly will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 14th of September. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Conagra Brands

How Does Total Compensation For Sean Connolly Compare With Other Companies In The Industry?

Our data indicates that Conagra Brands, Inc. has a market capitalization of US$14b, and total annual CEO compensation was reported as US$19m for the year to May 2023. Notably, that's an increase of 57% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.3m.

On comparing similar companies in the American Food industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$13m. Hence, we can conclude that Sean Connolly is remunerated higher than the industry median. Moreover, Sean Connolly also holds US$30m worth of Conagra Brands stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20232022Proportion (2023)
Salary US$1.3m US$1.3m 7%
Other US$17m US$11m 93%
Total CompensationUS$19m US$12m100%

Talking in terms of the industry, salary represented approximately 29% of total compensation out of all the companies we analyzed, while other remuneration made up 71% of the pie. It's interesting to note that Conagra Brands 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.

NYSE:CAG CEO Compensation September 8th 2023

A Look at Conagra Brands, Inc.'s Growth Numbers

Over the last three years, Conagra Brands, Inc. has shrunk its earnings per share by 6.0% per year. In the last year, its revenue is up 6.4%.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Conagra Brands, Inc. Been A Good Investment?

Given the total shareholder loss of 6.8% over three years, many shareholders in Conagra Brands, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for Conagra Brands (2 are concerning!) that you should be aware of before investing here.

Switching gears from Conagra Brands, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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

Find out whether Conagra Brands 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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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.