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Is The Container Store Group, Inc. (NYSE:TCS) Overpaying Its CEO?

Simply Wall St

Melissa Reiff became the CEO of The Container Store Group, Inc. (NYSE:TCS) in 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Container Store Group

How Does Melissa Reiff's Compensation Compare With Similar Sized Companies?

According to our data, The Container Store Group, Inc. has a market capitalization of US$227m, and pays its CEO total annual compensation worth US$2.5m. (This figure is for the year to March 2019). Notably, that's an increase of 53% over the year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$813k. We examined companies with market caps from US$100m to US$400m, and discovered that the median CEO total compensation of that group was US$1.2m.

It would therefore appear that The Container Store Group, Inc. pays Melissa Reiff more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see, below, how CEO compensation at Container Store Group has changed over time.

NYSE:TCS CEO Compensation, August 20th 2019

Is The Container Store Group, Inc. Growing?

The Container Store Group, Inc. has increased its earnings per share (EPS) by an average of 31% a year, over the last three years (using a line of best fit). Its revenue is up 4.5% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.

Has The Container Store Group, Inc. Been A Good Investment?

Given the total loss of 15% over three years, many shareholders in The Container Store Group, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We examined the amount The Container Store Group, Inc. pays its CEO, and compared it to the amount paid by 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. However, the returns to investors are far less impressive, over the same period. So shareholders might not feel great about the fact that CEO pay increased on last year. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Container Store Group.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.

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. Thank you for reading.