Will Powell became the CEO of Sears Hometown and Outlet Stores Inc (NASDAQ:SHOS) in 2015. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Will Powell’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Sears Hometown and Outlet Stores Inc has a market cap of US$58m, and is paying total annual CEO compensation of US$1m. Notably, that’s an increase of 48% over the year before. We looked at a group of companies with market capitalizations under US$200m, and the median CEO compensation was US$297k.
It would therefore appear that Sears Hometown and Outlet Stores Inc pays Will Powell more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Sears Hometown and Outlet Stores, below.
Is Sears Hometown and Outlet Stores Inc Growing?
Over the last three years Sears Hometown and Outlet Stores Inc has shrunk its earnings per share by an average of 13% per year. Its revenue is down -16% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.
We don’t have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Sears Hometown and Outlet Stores Inc Been A Good Investment?
Given the total loss of 68% over three years, many shareholders in Sears Hometown and Outlet Stores Inc are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared the total CEO remuneration paid by Sears Hometown and Outlet Stores Inc, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
Just as bad, share price gains for investors have failed to materialize, over the same period. And we’d be remiss not to note that the CEO remuneration has increased on last year. This analysis suggests to us that the CEO is paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling Sears Hometown and Outlet Stores Inc shares (free trial).
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.