Ed Rosenfeld has been the CEO of Steven Madden, Ltd. (NASDAQ:SHOO) since 2008. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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 Ed Rosenfeld's Compensation Compare With Similar Sized Companies?
Our data indicates that Steven Madden, Ltd. is worth US$3.1b, and total annual CEO compensation was reported as US$7.1m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$899k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.1m.
Thus we can conclude that Ed Rosenfeld receives more in total compensation than the median of a group of companies in the same market, and of similar size to Steven Madden, Ltd.. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Steven Madden has changed from year to year.
Is Steven Madden, Ltd. Growing?
Over the last three years Steven Madden, Ltd. has grown its earnings per share (EPS) by an average of 8.4% per year (using a line of best fit). Its revenue is up 8.5% over last year.
I would argue that the improvement in revenue isn't particularly impressive, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. You might want to check this free visual report on analyst forecasts for future earnings.
Has Steven Madden, Ltd. Been A Good Investment?
Boasting a total shareholder return of 69% over three years, Steven Madden, Ltd. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount Steven Madden, Ltd. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Over the last three years returns to investors have been great, though we might have liked stronger business growth. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Steven Madden.
If you want to buy a stock that is better than Steven Madden, this free list of high return, low debt companies is a great place to look.
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