Here's Why The J. M. Smucker Company's (NYSE:SJM) CEO Compensation Is The Least Of Shareholders Concerns

Key Insights

• J. M. Smucker to hold its Annual General Meeting on 14th of August
• Total pay for CEO Mark Smucker includes US$1.18m salary
• The overall pay is 34% below the industry average
• J. M. Smucker's total shareholder return over the past three years was 0.3% while its EPS was down 3.6% over the past three years

The performance at The J. M. Smucker Company (NYSE:SJM) has been rather lacklustre of late and shareholders may be wondering what CEO Mark Smucker is planning to do about this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 14th of August. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We think CEO compensation looks appropriate given the data we have put together.

See our latest analysis for J. M. Smucker

Comparing The J. M. Smucker Company's CEO Compensation With The Industry

Our data indicates that The J. M. Smucker Company has a market capitalization of US$13b, and total annual CEO compensation was reported as US$10m for the year to April 2024. That's a notable decrease of 8.6% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.2m.

For comparison, other companies in the American Food industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$16m. This suggests that Mark Smucker is paid below the industry median. What's more, Mark Smucker holds US$26m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	US$1.2m	US$1.1m	11%
Other	US$9.2m	US$10m	89%
Total Compensation	US$10m	US$11m	100%

On an industry level, around 19% of total compensation represents salary and 81% is other remuneration. In J. M. Smucker's 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.

The J. M. Smucker Company's Growth

Over the last three years, The J. M. Smucker Company has shrunk its earnings per share by 3.6% per year. In the last year, its revenue is down 4.1%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has The J. M. Smucker Company Been A Good Investment?

The J. M. Smucker Company has generated a total shareholder return of 0.3% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

In Summary...

Shareholder returns while positive, need to be looked at along with earnings, which have failed to grow and this could mean that the current momentum may not continue. These concerns could be addressed to the board and shareholders should revisit their investment thesis to see if it still makes sense.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for J. M. Smucker (1 is a bit unpleasant!) that you should be aware of before investing here.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com