Laura Alber became the CEO of Williams-Sonoma, Inc. (NYSE:WSM) in 2010. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Laura Alber's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Williams-Sonoma, Inc. has a market cap of US$5.1b, and reported total annual CEO compensation of US$27m for the year to February 2019. While we always look at total compensation first, we note that the salary component is less, at US$1.5m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$6.9m.
As you can see, Laura Alber is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Williams-Sonoma, Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Williams-Sonoma, below.
Is Williams-Sonoma, Inc. Growing?
On average over the last three years, Williams-Sonoma, Inc. has grown earnings per share (EPS) by 7.3% each year (using a line of best fit). It achieved revenue growth of 6.3% over the last year.
I'm not particularly impressed by the revenue growth, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. You might want to check this free visual report on analyst forecasts for future earnings.
Has Williams-Sonoma, Inc. Been A Good Investment?
I think that the total shareholder return of 42%, over three years, would leave most Williams-Sonoma, Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount Williams-Sonoma, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
One might like to have seen stronger growth, but shareholder returns have been pleasing, over the last three years. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Williams-Sonoma (free visualization of insider trades).
If you want to buy a stock that is better than Williams-Sonoma, this free list of high return, low debt companies is a great place to look.
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