Key Insights

• General Mills will host its Annual General Meeting on 24th of September
• Salary of US$1.33m is part of CEO Jeff Harmening's total remuneration
• The overall pay is comparable to the industry average
• General Mills' EPS grew by 5.6% over the past three years while total shareholder return over the past three years was 41%

CEO Jeff Harmening has done a decent job of delivering relatively good performance at General Mills, Inc. (NYSE:GIS) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 24th of September. We present our case of why we think CEO compensation looks fair.

Comparing General Mills, Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that General Mills, Inc. has a market capitalization of US$42b, and reported total annual CEO compensation of US$16m for the year to May 2024. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.3m.

On comparing similar companies in the American Food industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$12m. So it looks like General Mills compensates Jeff Harmening in line with the median for the industry. What's more, Jeff Harmening holds US$24m 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 18% of total compensation out of all the companies we analyzed, while other remuneration made up 82% 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.

General Mills, Inc.'s Growth

Over the past three years, General Mills, Inc. has seen its earnings per share (EPS) grow by 5.6% per year. Its revenue is down 1.2% over the previous year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest EPS growth gives us some relief. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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?

Most shareholders would probably be pleased with General Mills, Inc. for providing a total return of 41% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its 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. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for General Mills that investors should look into moving forward.

Switching gears from General Mills, 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.