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Jim Snee became the CEO of Hormel Foods Corporation (NYSE:HRL) in 2016. This analysis aims first to contrast CEO compensation with other large companies. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Jim Snee’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Hormel Foods Corporation has a market cap of US$21b, and is paying total annual CEO compensation of US$6.4m. (This is based on the year to October 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$883k. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts – even though some are quite a bit bigger than others).
This would give shareholders a good impression of the company, since most large companies pay more, leaving less for shareholders. Though positive, it’s important we delve into the performance of the actual business.
The graphic below shows how CEO compensation at Hormel Foods has changed from year to year.
Is Hormel Foods Corporation Growing?
Hormel Foods Corporation has increased its earnings per share (EPS) by an average of 7.4% a year, over the last three years (using a line of best fit). Its revenue is up 3.9% over last year.
I’d prefer higher revenue growth, but it is good to see modest EPS growth. Considering these factors I’d say performance has been pretty decent, though not amazing. You might want to check this free visual report on analyst forecasts for future earnings.
Has Hormel Foods Corporation Been A Good Investment?
With a total shareholder return of 5.9% over three years, Hormel Foods Corporation has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.
It looks like Hormel Foods Corporation pays its CEO less than the average at large companies.
Jim Snee receives relatively low remuneration compared to other large companies. But the company isn’t exactly firing on all cylinders, from my perspective. However I do not find the CEO compensation to be concerning. So you may want to check if insiders are buying Hormel Foods shares with their own money (free access).
If you want to buy a stock that is better than Hormel Foods, this free list of high return, low debt companies is a great place to look.
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If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.