Why We Think General Mills, Inc.'s (NYSE:GIS) CEO Compensation Is Not Excessive At All

Key Insights

• General Mills will host its Annual General Meeting on 24th of September
• Total pay for CEO Jeff Harmening includes US$1.33m salary
• Total compensation is similar to the industry average
• General Mills' total shareholder return over the past three years was 41% while its EPS grew by 5.6% over the past three years

CEO Jeff Harmening has done a decent job of delivering relatively good performance at General Mills, Inc. (NYSE:GIS) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 24th of September. We present our case of why we think CEO compensation looks fair.

See our latest analysis for General Mills

Comparing General Mills, Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that General Mills, Inc. has a market capitalization of US$42b, and reported total annual CEO compensation of US$16m for the year to May 2024. 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$1.3m.

For comparison, other companies in the American Food industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$12m. This suggests that General Mills remunerates its CEO largely in line with the industry average. Furthermore, Jeff Harmening directly owns US$24m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	US$1.3m	US$1.3m	8%
Other	US$15m	US$15m	92%
Total Compensation	US$16m	US$16m	100%

On an industry level, around 18% of total compensation represents salary and 82% is other remuneration. General Mills pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

General Mills, Inc.'s Growth

Over the past three years, General Mills, Inc. has seen its earnings per share (EPS) grow by 5.6% per year. It saw its revenue drop 1.2% over the last year.

We would prefer it if there was revenue growth, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has General Mills, Inc. Been A Good Investment?

Boasting a total shareholder return of 41% over three years, General Mills, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for General Mills that you should be aware of before investing.

Switching gears from General Mills, 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.

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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.