It Looks Like Conagra Brands, Inc.'s (NYSE:CAG) CEO May Expect Their Salary To Be Put Under The Microscope

Key Insights

• Conagra Brands will host its Annual General Meeting on 14th of September

• Salary of US$1.32m is part of CEO Sean Connolly's total remuneration

• The total compensation is 41% higher than the average for the industry

• Conagra Brands' three-year loss to shareholders was 6.8% while its EPS was down 6.0% over the past three years

The results at Conagra Brands, Inc. (NYSE:CAG) have been quite disappointing recently and CEO Sean Connolly bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 14th of September. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Conagra Brands

Comparing Conagra Brands, Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that Conagra Brands, Inc. has a market capitalization of US$14b, and reported total annual CEO compensation of US$19m for the year to May 2023. That's a notable increase of 57% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.3m.

For comparison, other companies in the American Food industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$13m. Accordingly, our analysis reveals that Conagra Brands, Inc. pays Sean Connolly north of the industry median. What's more, Sean Connolly holds US$30m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 29% of total compensation represents salary and 71% is other remuneration. In Conagra Brands' 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.

A Look at Conagra Brands, Inc.'s Growth Numbers

Over the last three years, Conagra Brands, Inc. has shrunk its earnings per share by 6.0% per year. It achieved revenue growth of 6.4% over the last year.

The decline in EPS is a bit concerning. 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. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Conagra Brands, Inc. Been A Good Investment?

Given the total shareholder loss of 6.8% over three years, many shareholders in Conagra Brands, Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 3 warning signs (and 2 which are potentially serious) in Conagra Brands we think you should know about.

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.