It's Probably Less Likely That Conagra Brands, Inc.'s (NYSE:CAG) CEO Will See A Huge Pay Rise This Year

In the past three years, shareholders of Conagra Brands, Inc. (NYSE:CAG) have seen a loss on their investment. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 15 September 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Conagra Brands

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

At the time of writing, our data shows that Conagra Brands, Inc. has a market capitalization of US$16b, and reported total annual CEO compensation of US$12m for the year to May 2021. This means that the compensation hasn't changed much from last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.2m.

For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$12m. So it looks like Conagra Brands compensates Sean Connolly in line with the median for the industry. What's more, Sean Connolly holds US$24m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	US$1.2m	US$1.2m	10%
Other	US$11m	US$11m	90%
Total Compensation	US$12m	US$12m	100%

On an industry level, around 33% of total compensation represents salary and 67% is other remuneration. In Conagra Brands' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

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

Over the past three years, Conagra Brands, Inc. has seen its earnings per share (EPS) grow by 11% per year. It achieved revenue growth of 1.2% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few 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 Conagra Brands, Inc. Been A Good Investment?

Since shareholders would have lost about 2.4% over three years, some Conagra Brands, Inc. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 2 warning signs for Conagra Brands you should be aware of, and 1 of them can't be ignored.

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.
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