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How Should Investors Feel About Xcel Brands' (NASDAQ:XELB) CEO Remuneration?

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This article will reflect on the compensation paid to Robert D'Loren who has served as CEO of Xcel Brands, Inc. (NASDAQ:XELB) since 2011. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Xcel Brands.

View our latest analysis for Xcel Brands

Comparing Xcel Brands, Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that Xcel Brands, Inc. has a market capitalization of US$18m, and reported total annual CEO compensation of US$1.8m for the year to December 2019. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$889k.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$863k. Accordingly, our analysis reveals that Xcel Brands, Inc. pays Robert D'Loren north of the industry median. Furthermore, Robert D'Loren directly owns US$4.6m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2019

2018

Proportion (2019)

Salary

US$889k

US$889k

48%

Other

US$948k

US$972k

52%

Total Compensation

US$1.8m

US$1.9m

100%

Talking in terms of the industry, salary represented approximately 20% of total compensation out of all the companies we analyzed, while other remuneration made up 80% of the pie. It's interesting to note that Xcel Brands pays out a greater portion of remuneration through salary, compared to the industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

Xcel Brands, Inc.'s Growth

Xcel Brands, Inc.'s earnings per share (EPS) grew 5.3% per year over the last three years. Its revenue is down 17% over the previous year.

We generally like to see a little revenue growth, but the modest improvement in EPS is good. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Xcel Brands, Inc. Been A Good Investment?

Given the total shareholder loss of 63% over three years, many shareholders in Xcel Brands, Inc. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we noted earlier, Xcel Brands pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Over the last three years, shareholder returns have been downright disappointing for Xcel Brands, and although EPS growth is steady, it hasn't set the world on fire. This doesn't look great when you consider Robert is taking home compensation north of the industry average. With such poor returns, we would understand if shareholders had concerns related to the CEO's pay.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 3 warning signs (and 1 which makes us a bit uncomfortable) in Xcel Brands we think you should know about.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.