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Is Inter Parfums, Inc.'s (NASDAQ:IPAR) CEO Overpaid Relative To Its Peers?

Simply Wall St

In 1997 Jean Madar was appointed CEO of Inter Parfums, Inc. (NASDAQ:IPAR). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Inter Parfums

How Does Jean Madar's Compensation Compare With Similar Sized Companies?

Our data indicates that Inter Parfums, Inc. is worth US$2.2b, and total annual CEO compensation was reported as US$995k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$630k. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$3.9m.

A first glance this seems like a real positive for shareholders, since Jean Madar is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion.

You can see, below, how CEO compensation at Inter Parfums has changed over time.

NasdaqGS:IPAR CEO Compensation, December 4th 2019

Is Inter Parfums, Inc. Growing?

On average over the last three years, Inter Parfums, Inc. has grown earnings per share (EPS) by 20% each year (using a line of best fit). It achieved revenue growth of 10% over the last year.

This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Shareholders might be interested in this free visualization of analyst forecasts.

Has Inter Parfums, Inc. Been A Good Investment?

I think that the total shareholder return of 115%, over three years, would leave most Inter Parfums, Inc. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Inter Parfums, Inc. is currently paying its CEO below what is normal for companies of its size.

Since the business is growing, many would argue this suggests the pay is modest. The strong history of shareholder returns might even have some thinking that Jean Madar deserves a raise! Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. So you may want to check if insiders are buying Inter Parfums shares with their own money (free access).

If you want to buy a stock that is better than Inter Parfums, 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.

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