Shareholders May Be More Conservative With Oil-Dri Corporation of America's (NYSE:ODC) CEO Compensation For Now

Despite Oil-Dri Corporation of America's (NYSE:ODC) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. The upcoming AGM on 07 December 2022 may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

View our latest analysis for Oil-Dri Corporation of America

Comparing Oil-Dri Corporation of America's CEO Compensation With The Industry

At the time of writing, our data shows that Oil-Dri Corporation of America has a market capitalization of US$233m, and reported total annual CEO compensation of US$1.8m for the year to July 2022. Notably, that's a decrease of 36% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$809k.

In comparison with other companies in the industry with market capitalizations ranging from US$100m to US$400m, the reported median CEO total compensation was US$412k. Hence, we can conclude that Dan Jaffee is remunerated higher than the industry median. Furthermore, Dan Jaffee directly owns US$17m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	US$809k	US$783k	44%
Other	US$1.0m	US$2.1m	56%
Total Compensation	US$1.8m	US$2.9m	100%

Speaking on an industry level, nearly 20% of total compensation represents salary, while the remainder of 80% is other remuneration. Oil-Dri Corporation of America is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Oil-Dri Corporation of America's Growth Numbers

Over the last three years, Oil-Dri Corporation of America has shrunk its earnings per share by 22% per year. Its revenue is up 14% over the last year.

Overall this is not a very positive result for shareholders. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Oil-Dri Corporation of America Been A Good Investment?

Oil-Dri Corporation of America has not done too badly by shareholders, with a total return of 5.9%, over three years. It would be nice to see that metric improve in the future. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 4 warning signs for Oil-Dri Corporation of America (of which 2 are significant!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Oil-Dri Corporation of America, 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.