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Is Haverty Furniture Companies, Inc. (NYSE:HVT) Excessively Paying Its CEO?

Simply Wall St

Clarence Smith became the CEO of Haverty Furniture Companies, Inc. (NYSE:HVT) in 2003. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.

View our latest analysis for Haverty Furniture Companies

How Does Clarence Smith's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Haverty Furniture Companies, Inc. has a market cap of US$415m, and reported total annual CEO compensation of US$1.7m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$660k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$1.8m.

So Clarence Smith receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at Haverty Furniture Companies has changed from year to year.

NYSE:HVT CEO Compensation, October 24th 2019
NYSE:HVT CEO Compensation, October 24th 2019

Is Haverty Furniture Companies, Inc. Growing?

Earnings per share at Haverty Furniture Companies, Inc. are much the same as they were three years ago, albeit slightly lower, based on the trend. Its revenue is down 2.7% over last year.

Unfortunately there is a complete lack of earnings per share improvement, over three years. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.

Has Haverty Furniture Companies, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Haverty Furniture Companies, Inc. for providing a total return of 43% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Clarence Smith is paid around what is normal the leaders of comparable size companies.

We feel that earnings per share have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. So we doubt many are complaining about the fairly normal CEO pay. Whatever your view on compensation, you might want to check if insiders are buying or selling Haverty Furniture Companies shares (free trial).

Important note: Haverty Furniture Companies 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.

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.

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. Thank you for reading.