U.S. markets open in 5 hours 57 minutes
  • S&P Futures

    3,837.75
    -4.75 (-0.12%)
     
  • Dow Futures

    30,767.00
    -75.00 (-0.24%)
     
  • Nasdaq Futures

    13,537.50
    +52.00 (+0.39%)
     
  • Russell 2000 Futures

    2,135.00
    -10.80 (-0.50%)
     
  • Crude Oil

    53.03
    +0.42 (+0.80%)
     
  • Gold

    1,844.00
    -6.90 (-0.37%)
     
  • Silver

    25.38
    -0.16 (-0.64%)
     
  • EUR/USD

    1.2152
    -0.0016 (-0.13%)
     
  • 10-Yr Bond

    1.0400
    0.0000 (0.00%)
     
  • Vix

    23.81
    +0.62 (+2.67%)
     
  • GBP/USD

    1.3734
    +0.0002 (+0.01%)
     
  • USD/JPY

    103.7050
    +0.0780 (+0.08%)
     
  • BTC-USD

    31,713.12
    +335.77 (+1.07%)
     
  • CMC Crypto 200

    636.99
    -2.93 (-0.46%)
     
  • FTSE 100

    6,651.60
    -2.41 (-0.04%)
     
  • Nikkei 225

    28,635.21
    +89.03 (+0.31%)
     

How Much Is The Cato Corporation (NYSE:CATO) Paying Its CEO?

Simply Wall St
·4 min read

John Derham Cato became the CEO of The Cato Corporation (NYSE:CATO) in 1999, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Cato.

View our latest analysis for Cato

Comparing The Cato Corporation's CEO Compensation With the industry

According to our data, The Cato Corporation has a market capitalization of US$165m, and paid its CEO total annual compensation worth US$5.3m over the year to February 2020. That's a notable increase of 23% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.3m.

In comparison with other companies in the industry with market capitalizations ranging from US$100m to US$400m, the reported median CEO total compensation was US$2.4m. Hence, we can conclude that John Derham Cato is remunerated higher than the industry median. Moreover, John Derham Cato also holds US$19m worth of Cato stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2020

2019

Proportion (2020)

Salary

US$1.3m

US$1.3m

25%

Other

US$4.0m

US$3.0m

75%

Total Compensation

US$5.3m

US$4.3m

100%

Speaking on an industry level, nearly 19% of total compensation represents salary, while the remainder of 81% is other remuneration. According to our research, Cato 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.

ceo-compensation
ceo-compensation

A Look at The Cato Corporation's Growth Numbers

The Cato Corporation's earnings per share (EPS) grew 6.2% per year over the last three years. Its revenue is down 15% over the previous year.

We would prefer it if there was revenue growth, but the modest EPS growth gives us some relief. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has The Cato Corporation Been A Good Investment?

Since shareholders would have lost about 45% over three years, some The Cato Corporation investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we touched on above, The Cato Corporation is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. While we have not been overly impressed by the business performance, the shareholder returns have been utterly depressing, over the last three years. This doesn't look great when you consider John is taking home compensation north of the industry average. Taking all this into account, it could be hard to get shareholder support for giving John a raise.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for Cato (1 can't be ignored!) that you should be aware of before investing here.

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.