Yahoo Finance Here's Why Shareholders May Want To Be Cautious With Increasing TreeHouse Foods, Inc.'s (NYSE:THS) CEO Pay Packet
Key Insights
TreeHouse Foods' Annual General Meeting to take place on 25th of April
Salary of US$1.09m is part of CEO Steve Oakland's total remuneration
The overall pay is 111% above the industry average
TreeHouse Foods' EPS grew by 35% over the past three years while total shareholder loss over the past three years was 28%
Shareholders of TreeHouse Foods, Inc. (NYSE:THS) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 25th of April could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
View our latest analysis for TreeHouse Foods
Comparing TreeHouse Foods, Inc.'s CEO Compensation With The Industry
At the time of writing, our data shows that TreeHouse Foods, Inc. has a market capitalization of US$2.0b, and reported total annual CEO compensation of US$9.4m for the year to December 2023. That's a notable decrease of 41% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.1m.
On examining similar-sized companies in the American Food industry with market capitalizations between US$1.0b and US$3.2b, we discovered that the median CEO total compensation of that group was US$4.5m. Accordingly, our analysis reveals that TreeHouse Foods, Inc. pays Steve Oakland north of the industry median. Furthermore, Steve Oakland directly owns US$10m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.1m | US$1.1m | 12% |
Other | US$8.3m | US$15m | 88% |
Total Compensation | US$9.4m | US$16m | 100% |
On an industry level, roughly 21% of total compensation represents salary and 79% is other remuneration. TreeHouse Foods 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.
TreeHouse Foods, Inc.'s Growth
Over the past three years, TreeHouse Foods, Inc. has seen its earnings per share (EPS) grow by 35% per year. Its revenue is up 4.1% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has TreeHouse Foods, Inc. Been A Good Investment?
Given the total shareholder loss of 28% over three years, many shareholders in TreeHouse Foods, Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.
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. In our study, we found 2 warning signs for TreeHouse Foods you should be aware of, and 1 of them is concerning.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.
