It would be hard to discount the role that CEO Jeff Harmening has played in delivering the impressive results at General Mills, Inc. (NYSE:GIS) recently. Coming up to the next AGM on 27 September 2022, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.
Comparing General Mills, Inc.'s CEO Compensation With The Industry
Our data indicates that General Mills, Inc. has a market capitalization of US$47b, and total annual CEO compensation was reported as US$12m for the year to May 2022. That's a notable decrease of 21% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.3m.
For comparison, other companies in the industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$11m. This suggests that General Mills remunerates its CEO largely in line with the industry average. What's more, Jeff Harmening holds US$17m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2022 | 2021 | Proportion (2022) |
| Salary | US$1.3m | US$1.3m | 10% |
| Other | US$11m | US$14m | 90% |
| Total Compensation | US$12m | US$16m | 100% |
Talking in terms of the industry, salary represented approximately 21% of total compensation out of all the companies we analyzed, while other remuneration made up 79% of the pie. General Mills pays a modest slice of remuneration through salary, as compared 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 General Mills, Inc.'s Growth Numbers
General Mills, Inc. has seen its earnings per share (EPS) increase by 13% a year over the past three years. It achieved revenue growth of 4.7% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 General Mills, Inc. Been A Good Investment?
Boasting a total shareholder return of 62% over three years, General Mills, Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
To Conclude...
The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for General Mills that investors should look into moving forward.
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.
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