In 1993 Robert Greenberg was appointed CEO of Skechers U.S.A., Inc. (NYSE:SKX). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Robert Greenberg's Compensation Compare With Similar Sized Companies?
Our data indicates that Skechers U.S.A., Inc. is worth US$5.4b, and total annual CEO compensation is US$7.8m. (This figure is for the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at US$4.2m. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$6.4m.
That means Robert Greenberg receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Skechers U.S.A has changed from year to year.
Is Skechers U.S.A., Inc. Growing?
On average over the last three years, Skechers U.S.A., Inc. has shrunk earnings per share by 6.7% each year (measured with a line of best fit). Its revenue is up 12% over last year.
Unfortunately, earnings per share have trended lower over the last three years. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for me to put aside my concerns around earnings. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Skechers U.S.A., Inc. Been A Good Investment?
With a total shareholder return of 20% over three years, Skechers U.S.A., Inc. shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
Remuneration for Robert Greenberg is close enough to the median pay for a CEO of a similar sized company .
We're not seeing great strides in earnings per share, and total returns were decent but not amazing in the last three years. We wouldn't say the CEO pay is too high, but it's probably fair to say that many shareholders would like to see improved performance, before any pay rise occurs. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Skechers U.S.A.
Important note: Skechers U.S.A 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.
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