What Can We Learn About Lands' End's (NASDAQ:LE) CEO Compensation?
Jerome Griffith became the CEO of Lands' End, Inc. (NASDAQ:LE) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Lands' End pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Lands' End
How Does Total Compensation For Jerome Griffith Compare With Other Companies In The Industry?
Our data indicates that Lands' End, Inc. has a market capitalization of US$966m, and total annual CEO compensation was reported as US$5.4m for the year to January 2020. Notably, that's an increase of 32% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.0m.
In comparison with other companies in the industry with market capitalizations ranging from US$400m to US$1.6b, the reported median CEO total compensation was US$1.6m. This suggests that Jerome Griffith is paid more than the median for the industry. Furthermore, Jerome Griffith directly owns US$7.8m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$1.0m | US$950k | 19% |
Other | US$4.4m | US$3.2m | 81% |
Total Compensation | US$5.4m | US$4.1m | 100% |
Talking in terms of the industry, salary represented approximately 24% of total compensation out of all the companies we analyzed, while other remuneration made up 76% of the pie. Lands' End pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Lands' End, Inc.'s Growth
Lands' End, Inc.'s earnings per share (EPS) grew 41% per year over the last three years. In the last year, its revenue is up 2.5%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Lands' End, Inc. Been A Good Investment?
Most shareholders would probably be pleased with Lands' End, Inc. for providing a total return of 50% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
As we touched on above, Lands' End, Inc. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, Lands' End has produced strong EPS growth and shareholder returns over the last three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. Given the strong history of shareholder returns, the shareholders are probably very happy with Jerome's performance.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 1 which makes us a bit uncomfortable) in Lands' End we think you should know about.
Switching gears from Lands' End, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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.
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