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Is Abercrombie & Fitch Co.'s (NYSE:ANF) CEO Being Overpaid?

Simply Wall St

In 2017 Fran Horowitz was appointed CEO of Abercrombie & Fitch Co. (NYSE:ANF). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Abercrombie & Fitch

How Does Fran Horowitz's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Abercrombie & Fitch Co. has a market cap of US$1.1b, and reported total annual CEO compensation of US$8.5m for the year to February 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.3m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$2.6m.

As you can see, Fran Horowitz is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Abercrombie & Fitch Co. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see, below, how CEO compensation at Abercrombie & Fitch has changed over time.

NYSE:ANF CEO Compensation, December 30th 2019

Is Abercrombie & Fitch Co. Growing?

On average over the last three years, Abercrombie & Fitch Co. has grown earnings per share (EPS) by 87% each year (using a line of best fit). Revenue was pretty flat on last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Revenue growth is a real positive for growth, but ultimately profits are more important. You might want to check this free visual report on analyst forecasts for future earnings.

Has Abercrombie & Fitch Co. Been A Good Investment?

I think that the total shareholder return of 66%, over three years, would leave most Abercrombie & Fitch Co. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We compared the total CEO remuneration paid by Abercrombie & Fitch Co., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. So you may want to check if insiders are buying Abercrombie & Fitch shares with their own money (free access).

If you want to buy a stock that is better than Abercrombie & Fitch, this free list of high return, low debt companies is a great place to look.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.