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Is Columbia Sportswear Company (NASDAQ:COLM) Excessively Paying Its CEO?

Simply Wall St

Tim Boyle has been the CEO of Columbia Sportswear Company (NASDAQ:COLM) since 1988. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Columbia Sportswear

How Does Tim Boyle's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Columbia Sportswear Company has a market cap of US$6.2b, and reported total annual CEO compensation of US$3.3m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$951k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$4.0b to US$12b. The median total CEO compensation was US$6.8m.

Most shareholders would consider it a positive that Tim Boyle takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.

The graphic below shows how CEO compensation at Columbia Sportswear has changed from year to year.

NasdaqGS:COLM CEO Compensation, December 2nd 2019
NasdaqGS:COLM CEO Compensation, December 2nd 2019

Is Columbia Sportswear Company Growing?

On average over the last three years, Columbia Sportswear Company has grown earnings per share (EPS) by 23% each year (using a line of best fit). Its revenue is up 13% over last year.

This demonstrates that the company has been improving recently. A good result. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. It could be important to check this free visual depiction of what analysts expect for the future.

Has Columbia Sportswear Company Been A Good Investment?

Most shareholders would probably be pleased with Columbia Sportswear Company for providing a total return of 65% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Columbia Sportswear Company is currently paying its CEO below what is normal for companies of its size.

Considering the underlying business is growing earnings, this would suggest the pay is modest. The strong history of shareholder returns might even have some thinking that Tim Boyle deserves a raise! Most shareholders like to see a modestly paid CEO combined with strong performance by the company. It would be even more positive if company insiders are buying shares. Whatever your view on compensation, you might want to check if insiders are buying or selling Columbia Sportswear shares (free trial).

Important note: Columbia Sportswear may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.