Key Insights

• J. M. Smucker will host its Annual General Meeting on 14th of August
• Salary of US$1.18m is part of CEO Mark Smucker's total remuneration
• Total compensation is 34% below industry average
• J. M. Smucker's EPS declined by 3.6% over the past three years while total shareholder return over the past three years was 0.3%

Shareholders may be wondering what CEO Mark Smucker plans to do to improve the less than great performance at The J. M. Smucker Company (NYSE:SJM) recently. At the next AGM coming up on 14th of August, they can influence managerial decision making through voting on resolutions, including executive remuneration. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. In our opinion, CEO compensation does not look excessive and we discuss why.

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

According to our data, The J. M. Smucker Company has a market capitalization of US$13b, and paid its CEO total annual compensation worth US$10m over the year to April 2024. We note that's a decrease of 8.6% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, 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. Furthermore, Mark Smucker directly owns US$26m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 19% of total compensation out of all the companies we analyzed, while other remuneration made up 81% of the pie. J. M. Smucker pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at The J. M. Smucker Company's Growth Numbers

Over the last three years, The J. M. Smucker Company has shrunk its earnings per share by 3.6% per year. It saw its revenue drop 4.1% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last 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?

With a total shareholder return of 0.3% over three years, The J. M. Smucker Company has done okay by shareholders, but there's always room for improvement. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

To Conclude...

While it's true that shareholders have seen decent returns, it's hard to overlook the lack of earnings growth and this makes us wonder if the current returns can continue. These concerns could be addressed to the board and shareholders should revisit their investment thesis to see if it still makes sense.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for J. M. Smucker (1 is a bit concerning!) that you should be aware of before investing here.

Important note: J. M. Smucker is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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