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Melissa Reiff has been the CEO of The Container Store Group, Inc. (NYSE:TCS) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Container Store Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Melissa Reiff Compare With Other Companies In The Industry?
At the time of writing, our data shows that The Container Store Group, Inc. has a market capitalization of US$609m, and reported total annual CEO compensation of US$2.4m for the year to March 2020. That's a slightly lower by 3.4% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$875k.
In comparison with other companies in the industry with market capitalizations ranging from US$400m to US$1.6b, the reported median CEO total compensation was US$2.8m. So it looks like Container Store Group compensates Melissa Reiff in line with the median for the industry. Furthermore, Melissa Reiff directly owns US$13m worth of shares in the company, implying that they are deeply invested in the company's success.
Speaking on an industry level, nearly 20% of total compensation represents salary, while the remainder of 80% is other remuneration. It's interesting to note that Container Store Group pays out a greater portion of remuneration through salary, compared to the industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at The Container Store Group, Inc.'s Growth Numbers
Over the past three years, The Container Store Group, Inc. has seen its earnings per share (EPS) grow by 55% per year. It saw its revenue drop 5.5% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has The Container Store Group, Inc. Been A Good Investment?
Most shareholders would probably be pleased with The Container Store Group, Inc. for providing a total return of 122% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As previously discussed, Melissa is compensated close to the median for companies of its size, and which belong to the same industry. The company is growing EPS and total shareholder returns have been pleasing. So one could argue that CEO compensation is quite modest, if you consider company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for Container Store Group you should be aware of, and 1 of them is concerning.
Important note: Container Store Group 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.
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. 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.
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