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Does Hooker Furniture Corporation's (NASDAQ:HOFT) CEO Pay Compare Well With Peers?

Simply Wall St

Paul Toms became the CEO of Hooker Furniture Corporation (NASDAQ:HOFT) in 2000. 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.

See our latest analysis for Hooker Furniture

How Does Paul Toms's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Hooker Furniture Corporation has a market cap of US$285m, and reported total annual CEO compensation of US$1.5m for the year to February 2019. While we always look at total compensation first, we note that the salary component is less, at US$415k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from US$100m to US$400m, and the median CEO total compensation was US$1.1m.

Thus we can conclude that Paul Toms receives more in total compensation than the median of a group of companies in the same market, and of similar size to Hooker Furniture Corporation. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at Hooker Furniture has changed over time.

NasdaqGS:HOFT CEO Compensation, February 5th 2020
NasdaqGS:HOFT CEO Compensation, February 5th 2020

Is Hooker Furniture Corporation Growing?

On average over the last three years, Hooker Furniture Corporation has grown earnings per share (EPS) by 8.6% each year (using a line of best fit). Its revenue is down 2.1% over last year.

I would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Shareholders might be interested in this free visualization of analyst forecasts.

Has Hooker Furniture Corporation Been A Good Investment?

Given the total loss of 20% over three years, many shareholders in Hooker Furniture Corporation are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared the total CEO remuneration paid by Hooker Furniture Corporation, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Although we'd stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. So you may want to check if insiders are buying Hooker Furniture shares with their own money (free access).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.