Mark Smucker has been the CEO of The J. M. Smucker Company (NYSE:SJM) since 2016. First, this article will compare CEO compensation with compensation at other large companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Mark Smucker's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that The J. M. Smucker Company has a market cap of US$12b, and reported total annual CEO compensation of US$8.1m for the year to April 2019. That's a notable increase of 19% on last year. While we always look at total compensation first, we note that the salary component is less, at US$970k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. 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. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
So Mark Smucker receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance. It could be important to check this free visual depiction of what analysts expect for the future.
The graphic below shows how CEO compensation at J. M. Smucker has changed from year to year.
Is The J. M. Smucker Company Growing?
The J. M. Smucker Company has increased its earnings per share (EPS) by an average of 7.2% a year, over the last three years (using a line of best fit). It achieved revenue growth of 2.7% over the last year.
I would argue that the improvement in revenue isn't particularly impressive, but the modest improvement in EPS is good. Considering these factors I'd say performance has been pretty decent, though not amazing.
Has The J. M. Smucker Company Been A Good Investment?
Since shareholders would have lost about 15% over three years, some The J. M. Smucker Company shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
Mark Smucker is paid around what is normal the leaders of larger companies.
We would like to see somewhat stronger per share growth. And it's hard to argue that the returns over the last three years have delighted. This contrasts with the growth in CEO remuneration. So it would take a bold person to suggest the pay is too modest. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at J. M. Smucker.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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