Key Insights

• Lancaster Colony's Annual General Meeting to take place on 8th of November
• Total pay for CEO Dave Ciesinski includes US$890.0k salary
• The total compensation is similar to the average for the industry
• Lancaster Colony's total shareholder return over the past three years was 6.8% while its EPS was down 6.8% over the past three years

Despite Lancaster Colony Corporation's (NASDAQ:LANC) 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. Some of these issues will occupy shareholders' minds as the AGM rolls around on 8th of November. 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.

See our latest analysis for Lancaster Colony

How Does Total Compensation For Dave Ciesinski Compare With Other Companies In The Industry?

Our data indicates that Lancaster Colony Corporation has a market capitalization of US$4.7b, and total annual CEO compensation was reported as US$5.0m for the year to June 2023. Notably, that's an increase of 34% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$890k.

In comparison with other companies in the American Food industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$6.0m. So it looks like Lancaster Colony compensates Dave Ciesinski in line with the median for the industry. Furthermore, Dave Ciesinski directly owns US$9.3m 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 29% of total compensation out of all the companies we analyzed, while other remuneration made up 71% of the pie. In Lancaster Colony's case, non-salary compensation represents a greater slice of total remuneration, in comparison 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.

Lancaster Colony Corporation's Growth

Over the last three years, Lancaster Colony Corporation has shrunk its earnings per share by 6.8% per year. In the last year, its revenue is up 8.7%.

Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. 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 Lancaster Colony Corporation Been A Good Investment?

Lancaster Colony Corporation has generated a total shareholder return of 6.8% 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.

To Conclude...

Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about whether these returns will continue. The upcoming AGM will provide shareholders the opportunity to revisit the company's remuneration policies and evaluate if the board's judgement and decision-making is aligned with that of the company's shareholders.

Shareholders may want to check for free if Lancaster Colony insiders are buying or selling shares.

Important note: Lancaster Colony 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.