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This article will reflect on the compensation paid to Robert Greenberg who has served as CEO of Skechers U.S.A., Inc. (NYSE:SKX) since 1993. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Skechers U.S.A.
Comparing Skechers U.S.A., Inc.'s CEO Compensation With the industry
According to our data, Skechers U.S.A., Inc. has a market capitalization of US$5.4b, and paid its CEO total annual compensation worth US$14m over the year to December 2019. Notably, that's a decrease of 50% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$5.2m.
For comparison, other companies in the same industry with market capitalizations ranging between US$4.0b and US$12b had a median total CEO compensation of US$9.5m. Accordingly, our analysis reveals that Skechers U.S.A., Inc. pays Robert Greenberg north of the industry median. Moreover, Robert Greenberg also holds US$172m worth of Skechers U.S.A stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, around 30% of total compensation represents salary and 70% is other remuneration. According to our research, Skechers U.S.A has allocated a higher percentage of pay to salary in comparison to the wider 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 Skechers U.S.A., Inc.'s Growth Numbers
Over the last three years, Skechers U.S.A., Inc. has shrunk its earnings per share by 14% per year. Its revenue is down 2.9% over the previous year.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Skechers U.S.A., Inc. Been A Good Investment?
Skechers U.S.A., Inc. has not done too badly by shareholders, with a total return of 2.1%, over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
As previously discussed, Robert is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn't look great when you realize that the company has been suffering from negative EPS growth for the last three years. And shareholder returns are decent but not great. So you can understand why we do not think CEO compensation is particularly modest!
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Skechers U.S.A that you should be aware of before investing.
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.
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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