You're curious about how much the CEO of a major company like Sysco makes? That's a great question, and it delves into the fascinating world of executive compensation! It's not just a simple salary figure; it's a complex package designed to incentivize performance and align leadership with shareholder interests.
Let's break down the compensation of Sysco's CEO, Kevin Hourican, and explore the various components that contribute to his overall earnings.
Decoding the Compensation of Sysco's CEO: A Step-by-Step Guide
Understanding executive compensation requires a bit of digging, but it's crucial for shareholders and interested observers alike. Here's a comprehensive guide to understanding how much the CEO of Sysco makes, and why.
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| How Much Does The Ceo Of Sysco Make |
Step 1: Identify the Current CEO and the Most Recent Reported Compensation
The very first thing we need to do is identify who the current CEO of Sysco is, and then find the most up-to-date information on their reported compensation.
Who is it? As of our last update, the CEO of Sysco is Kevin Hourican. He was appointed in February 2020.
What's the latest? For fiscal year 2024, Kevin Hourican's total yearly compensation was reported as $15.60 million.
This figure is often reported in the company's annual proxy statements (DEF 14A filings with the SEC), which are public documents providing detailed information on executive compensation.
Step 2: Break Down the Components of Total Compensation
Executive compensation is rarely just a flat salary. It's a multi-faceted package designed to attract top talent and motivate them to achieve specific company goals. Here's how Kevin Hourican's 2024 compensation breaks down:
Sub-heading 2.1: Base Salary
The Foundation: This is the fixed amount of money the CEO receives, regardless of company performance. It's the stable part of their income.
For Kevin Hourican: In 2024, his base salary was approximately $1.34 million. While substantial, notice that this only constitutes a small percentage of his total compensation.
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Sub-heading 2.2: Incentive Plan Compensation (Annual Bonus)
Performance-Based Pay: This component is tied to the company's short-term financial performance and the CEO's achievement of strategic objectives. It's often referred to as an "annual bonus" or "short-term incentive."
For Kevin Hourican: In 2024, he received approximately $2.22 million in incentive plan compensation. This shows a direct link between his performance and a significant portion of his pay.
Sub-heading 2.3: Stock Awards and Stock Options (Long-Term Incentives)
Aligning with Shareholders: This is arguably the most significant portion of a CEO's compensation and is designed to align their interests with those of the shareholders. By granting stock awards and options, the CEO is incentivized to increase the company's stock price over the long term.
For Kevin Hourican: In 2024, this was the largest component, totaling approximately $9.43 million in stock awards. He also directly owns 0.066% of the company's shares, valued at around $24.48 million, further solidifying his stake in Sysco's success. This typically includes:
Performance Share Units (PSUs): These vest based on the achievement of specific pre-determined performance metrics over a multi-year period (e.g., 3 years).
Restricted Stock Units (RSUs): These typically vest over time, encouraging the CEO to remain with the company.
Stock Options: These give the CEO the right to purchase company stock at a pre-determined price, benefiting if the stock price rises above that price.
Sub-heading 2.4: All Other Compensation
The "Extras": This category includes a variety of benefits and perks that are not directly tied to salary or performance incentives.
For Kevin Hourican: In 2024, this amounted to approximately $204,840. This can include things like:
Perquisites: Such as personal use of company aircraft (though Sysco specifically states they do not provide automobiles, security monitoring, or split-dollar life insurance for executives), financial planning services, or club memberships.
Retirement Plan Contributions: Contributions to non-qualified deferred compensation plans or supplemental executive retirement plans (SERPs).
Health and Welfare Benefits: While executives generally participate in the same health plans as other employees, there might be additional benefits or different contribution structures.
Relocation Expenses: If applicable, especially when a CEO is initially hired.
Step 3: Understand the "Why" Behind the Numbers
The compensation package isn't arbitrary. It's carefully constructed by Sysco's Compensation and Leadership Development Committee of the Board of Directors, often with the help of independent compensation consultants.
Sub-heading 3.1: Performance Linkage
Driving Results: A significant portion of the CEO's pay is at risk, meaning it's dependent on Sysco's financial performance. This incentivizes the CEO to make decisions that benefit the company's profitability, sales growth, and overall shareholder value. Sysco's 2024 operating income growth of 5.4% and adjusted EPS growth of 7.5% would have directly impacted incentive payouts.
Sub-heading 3.2: Market Competitiveness
Attracting Top Talent: Sysco operates in a competitive global market for executive talent. To attract and retain a CEO of Kevin Hourican's caliber, the compensation package must be competitive with what other CEOs in similar-sized companies and industries are earning. Sysco's CEO compensation is reported as being about average for companies of similar size in the US market ($15.60M vs $13.77M average).
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Sub-heading 3.3: Shareholder Alignment
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Long-Term Vision: The heavy emphasis on stock awards and options ensures that the CEO has a direct financial stake in the long-term success and stock performance of Sysco. This encourages strategic decisions that create sustainable value for shareholders.
Step 4: Consider the CEO Pay Ratio
Publicly traded companies are required to disclose the ratio of their CEO's compensation to the median employee's compensation. This provides a perspective on the internal pay disparity within the company.
Sysco's Ratio: For fiscal year 2024, Sysco reported a CEO pay ratio of 217:1. This means Kevin Hourican's compensation was 217 times that of the median Sysco employee, whose compensation was $71,868. This figure is often a point of discussion and debate among investors and the public.
Step 5: Review Historical Trends (Optional but Insightful)
Looking at how the CEO's compensation has changed over time can provide valuable context.
Growth in Compensation: Kevin Hourican's total compensation has seen increases over the past few years:
2022: $13.66 million
2023: $14.34 million
2024: $15.60 million (an 8.77% increase from 2023)
This upward trend often reflects strong company performance and/or market adjustments.
By following these steps, you can gain a comprehensive understanding of how much the CEO of Sysco makes, and more importantly, the rationale and structure behind that compensation. It's a testament to the intricate financial mechanisms that govern leadership in large corporations.
10 Related FAQ Questions
How to calculate total executive compensation?
Total executive compensation is typically calculated by summing base salary, annual incentive plan compensation (bonus), the grant date fair value of stock and option awards (long-term incentives), and all other compensation (perquisites, retirement contributions, etc.).
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How to find a company's CEO salary information?
You can find a company's CEO salary information in their annual proxy statement (Form DEF 14A), which is filed with the U.S. Securities and Exchange Commission (SEC) and is publicly available on the SEC's EDGAR database or the company's investor relations website.
How to interpret stock awards in executive compensation?
Stock awards (like PSUs and RSUs) are typically valued at their grant date fair value. This means the value is calculated at the time they are granted, but the actual payout or value realized by the executive will depend on the company's stock price performance and the vesting schedule.
How to understand the purpose of long-term incentives for CEOs?
Long-term incentives (stock awards, stock options) are designed to align the CEO's financial interests with the long-term success and shareholder value creation of the company, encouraging sustainable growth and strategic decisions that benefit investors over several years.
How to evaluate if a CEO's compensation is "fair"?
Evaluating fairness involves comparing the CEO's pay to peers in similar industries and company sizes, assessing the company's financial performance relative to the compensation, and considering the CEO pay ratio. It's often a subjective assessment based on various factors.
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How to influence executive compensation as a shareholder?
Shareholders can influence executive compensation through "say-on-pay" votes at annual meetings, engaging with the company's board of directors and compensation committee, and voting for or against director nominees responsible for compensation decisions.
How to distinguish between salary and bonus for a CEO?
Salary is a fixed annual payment, while a bonus (or annual incentive plan compensation) is a variable payment tied to the achievement of short-term financial goals and individual performance objectives.
How to account for benefits and perks in CEO compensation?
Benefits and perks (classified as "all other compensation") include a range of non-cash benefits such as retirement plan contributions, health benefits, personal use of company assets (if applicable), and other miscellaneous allowances, detailed in the proxy statement.
How to analyze the CEO pay ratio?
The CEO pay ratio compares the CEO's total compensation to the median annual total compensation of all other employees. A higher ratio indicates a larger disparity in pay within the company, which can be a point of concern for some stakeholders.
How to understand the role of the compensation committee?
The compensation committee, a sub-committee of the board of directors, is responsible for setting, reviewing, and approving the compensation of the CEO and other senior executives, often with input from independent compensation consultants, ensuring it aligns with company strategy and shareholder interests.
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