Key Insights

• United Natural Foods to hold its Annual General Meeting on 17th of December
• CEO Sandy Douglas' total compensation includes salary of US$1.07m
• The total compensation is 47% higher than the average for the industry
• United Natural Foods' EPS declined by 97% over the past three years while total shareholder loss over the past three years was 42%

The results at United Natural Foods, Inc. (NYSE:UNFI) have been quite disappointing recently and CEO Sandy Douglas bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 17th of December. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

Comparing United Natural Foods, Inc.'s CEO Compensation With The Industry

According to our data, United Natural Foods, Inc. has a market capitalization of US$1.5b, and paid its CEO total annual compensation worth US$7.6m over the year to August 2024. That's a notable increase of 23% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.1m.

In comparison with other companies in the American Consumer Retailing industry with market capitalizations ranging from US$1.0b to US$3.2b, the reported median CEO total compensation was US$5.2m. This suggests that Sandy Douglas is paid more than the median for the industry. What's more, Sandy Douglas holds US$4.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 13% of total compensation represents salary and 87% is other remuneration. It's interesting to note that United Natural Foods pays out a greater portion of remuneration through salary, compared to the industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

United Natural Foods, Inc.'s Growth

Over the last three years, United Natural Foods, Inc. has shrunk its earnings per share by 97% per year. Its revenue is up 3.3% over the last year.

Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 United Natural Foods, Inc. Been A Good Investment?

The return of -42% over three years would not have pleased United Natural Foods, Inc. shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

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. That's why we did our research, and identified 2 warning signs for United Natural Foods (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from United Natural 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.