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Is G-III Apparel Group, Ltd.'s (NASDAQ:GIII) CEO Paid At A Competitive Rate?

Simply Wall St

Morris Goldfarb is the CEO of G-III Apparel Group, Ltd. (NASDAQ:GIII). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for G-III Apparel Group

How Does Morris Goldfarb's Compensation Compare With Similar Sized Companies?

According to our data, G-III Apparel Group, Ltd. has a market capitalization of US$1.4b, and paid its CEO total annual compensation worth US$18m over the year to January 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.9m.

Thus we can conclude that Morris Goldfarb receives more in total compensation than the median of a group of companies in the same market, and of similar size to G-III Apparel Group, Ltd.. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

The graphic below shows how CEO compensation at G-III Apparel Group has changed from year to year.

NasdaqGS:GIII CEO Compensation, December 4th 2019

Is G-III Apparel Group, Ltd. Growing?

On average over the last three years, G-III Apparel Group, Ltd. has grown earnings per share (EPS) by 31% each year (using a line of best fit). Its revenue is up 4.7% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.

Has G-III Apparel Group, Ltd. Been A Good Investment?

With a three year total loss of 4.0%, G-III Apparel Group, Ltd. would certainly have some dissatisfied shareholders. 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 G-III Apparel Group, Ltd., and compared it to remuneration at a group of 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. Having said that, shareholders may be disappointed with the weak returns over the last three years. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling G-III Apparel Group shares (free trial).

If you want to buy a stock that is better than G-III Apparel Group, this free list of high return, low debt companies is a great place to look.

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.