Robert Sumas became the CEO of Village Super Market, Inc. (NASDAQ:VLGE.A) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing Village Super Market, Inc.'s CEO Compensation With the industry
According to our data, Village Super Market, Inc. has a market capitalization of US$335m, and paid its CEO total annual compensation worth US$1.7m over the year to July 2020. We note that's an increase of 57% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$815k.
On comparing similar companies from the same industry with market caps ranging from US$200m to US$800m, we found that the median CEO total compensation was US$2.5m. From this we gather that Robert Sumas is paid around the median for CEOs in the industry. What's more, Robert Sumas holds US$23m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Talking in terms of the industry, salary represented approximately 16% of total compensation out of all the companies we analyzed, while other remuneration made up 84% of the pie. Village Super Market is paying a higher share of its remuneration through a salary in comparison to the overall 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 Village Super Market, Inc.'s Growth Numbers
Over the past three years, Village Super Market, Inc. has seen its earnings per share (EPS) grow by 2.4% per year. Its revenue is up 9.8% over the last year.
We'd prefer higher revenue growth, but it is good to see modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Village Super Market, Inc. Been A Good Investment?
With a total shareholder return of 8.7% over three years, Village Super Market, Inc. has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.
As we touched on above, Village Super Market, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, EPS and shareholder returns have been stable over the last three years, but have not grown substantially. We'd say that Robert is remunerated reasonably, but shareholders might be looking for better returns before they agree Robert deserves a raise.
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 Village Super Market (1 doesn't sit too well with us!) that you should be aware of before investing here.
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.
This article by Simply Wall St is general in nature. 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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