Dennis Nelson has been the CEO of The Buckle, Inc. (NYSE:BKE) since 1997, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing The Buckle, Inc.'s CEO Compensation With the industry
Our data indicates that The Buckle, Inc. has a market capitalization of US$1.6b, and total annual CEO compensation was reported as US$3.0m for the year to February 2020. This means that the compensation hasn't changed much from last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.1m.
On examining similar-sized companies in the industry with market capitalizations between US$1.0b and US$3.2b, we discovered that the median CEO total compensation of that group was US$5.2m. This suggests that Dennis Nelson is paid below the industry median. What's more, Dennis Nelson holds US$82m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 20% of total compensation represents salary, while the remainder of 80% is other remuneration. According to our research, Buckle has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
The Buckle, Inc.'s Growth
The Buckle, Inc.'s earnings per share (EPS) grew 9.7% per year over the last three years. Its revenue is down 4.5% over the previous year.
We generally like to see a little revenue growth, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has The Buckle, Inc. Been A Good Investment?
Boasting a total shareholder return of 108% over three years, The Buckle, Inc. has done well by shareholders. 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.
As previously discussed, Dennis is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. In contrast, shareholder returns have been excellent over the past three years, and that’s certainly a promising trend to keep an eye on. Considering this fine result for investors, we believe CEO compensation to be apt.
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 identified 4 warning signs for Buckle (1 shouldn't be ignored!) that you should be aware of before investing here.
Switching gears from Buckle, 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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