Key Insights

• Nature's Sunshine Products will host its Annual General Meeting on 1st of May
• CEO Terrence Moorehead's total compensation includes salary of US$800.0k
• The overall pay is 39% below the industry average
• Nature's Sunshine Products' EPS declined by 9.8% over the past three years while total shareholder loss over the past three years was 2.5%

Performance at Nature's Sunshine Products, Inc. (NASDAQ:NATR) has not been particularly rosy recently and shareholders will likely be holding CEO Terrence Moorehead and the board accountable for this. At the upcoming AGM on 1st of May, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. From our analysis below, we think CEO compensation looks appropriate for now.

Comparing Nature's Sunshine Products, Inc.'s CEO Compensation With The Industry

Our data indicates that Nature's Sunshine Products, Inc. has a market capitalization of US$372m, and total annual CEO compensation was reported as US$3.5m for the year to December 2023. We note that's an increase of 26% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$800k.

In comparison with other companies in the American Personal Products industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$5.8m. Accordingly, Nature's Sunshine Products pays its CEO under the industry median. Moreover, Terrence Moorehead also holds US$7.4m worth of Nature's Sunshine Products stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 66% of total compensation out of all the companies we analyzed, while other remuneration made up 34% of the pie. In Nature's Sunshine Products' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Nature's Sunshine Products, Inc.'s Growth Numbers

Over the last three years, Nature's Sunshine Products, Inc. has shrunk its earnings per share by 9.8% per year. It achieved revenue growth of 5.5% over the last year.

Few shareholders would be pleased to read that EPS have declined. 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 Nature's Sunshine Products, Inc. Been A Good Investment?

With a three year total loss of 2.5% for the shareholders, Nature's Sunshine Products, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Nature's Sunshine Products that investors should think about before committing capital to this stock.

Important note: Nature's Sunshine Products is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.