The anaemic share price growth at Hormel Foods Corporation (NYSE:HRL) over the past few years has probably not impressed shareholders and may be due to earnings not growing over that period. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 01 February 2023. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. 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 Hormel Foods

Comparing Hormel Foods Corporation's CEO Compensation With The Industry

Our data indicates that Hormel Foods Corporation has a market capitalization of US$24b, and total annual CEO compensation was reported as US$9.5m for the year to October 2022. That's a slight decrease of 4.8% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.

On comparing similar companies in the American Food industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$12m. From this we gather that Jim Snee is paid around the median for CEOs in the industry. Moreover, Jim Snee also holds US$8.0m worth of Hormel Foods stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 25% of total compensation out of all the companies we analyzed, while other remuneration made up 75% of the pie. In Hormel Foods' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Hormel Foods Corporation's Growth Numbers

Over the last three years, Hormel Foods Corporation has not seen its earnings per share change much, though they have deteriorated slightly. It achieved revenue growth of 9.5% over the last year.

A lack of EPS improvement is not good to see. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Hormel Foods Corporation Been A Good Investment?

Hormel Foods Corporation has generated a total shareholder return of 0.4% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

The flat share price growth combined with the the fact that earnings have failed to grow makes us wonder whether the share price will have any further strong momentum. 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.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Hormel Foods that investors should look into moving forward.

Important note: Hormel Foods 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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