Key Insights
- Lifeway Foods to hold its Annual General Meeting on 14th of June
- CEO Julie Smolyansky's total compensation includes salary of US$1.00m
- Total compensation is 129% above industry average
- Lifeway Foods' total shareholder return over the past three years was 143% while its EPS grew by 46% over the past three years
Under the guidance of CEO Julie Smolyansky, Lifeway Foods, Inc. (NASDAQ:LWAY) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 14th of June. However, some shareholders will still be cautious of paying the CEO excessively.
Comparing Lifeway Foods, Inc.'s CEO Compensation With The Industry
Our data indicates that Lifeway Foods, Inc. has a market capitalization of US$187m, and total annual CEO compensation was reported as US$3.4m for the year to December 2023. We note that's an increase of 19% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.0m.
On comparing similar companies from the American Food industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$1.5m. Accordingly, our analysis reveals that Lifeway Foods, Inc. pays Julie Smolyansky north of the industry median. Moreover, Julie Smolyansky also holds US$28m worth of Lifeway Foods stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2023 | 2022 | Proportion (2023) |
| Salary | US$1.0m | US$1.0m | 30% |
| Other | US$2.4m | US$1.8m | 70% |
| Total Compensation | US$3.4m | US$2.8m | 100% |
Speaking on an industry level, nearly 19% of total compensation represents salary, while the remainder of 81% is other remuneration. According to our research, Lifeway Foods has allocated a higher percentage of pay to salary in comparison to the wider industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Lifeway Foods, Inc.'s Growth
Lifeway Foods, Inc.'s earnings per share (EPS) grew 46% per year over the last three years. In the last year, its revenue is up 15%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 Lifeway Foods, Inc. Been A Good Investment?
Boasting a total shareholder return of 143% over three years, Lifeway Foods, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.
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 Lifeway Foods you should be aware of, and 1 of them is significant.
Switching gears from Lifeway Foods, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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.