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Howard Lorber became the CEO of Vector Group Ltd. (NYSE:VGR) in 2006. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Howard Lorber's Compensation Compare With Similar Sized Companies?
According to our data, Vector Group Ltd. has a market capitalization of US$1.4b, and pays its CEO total annual compensation worth US$8.4m. (This is based on the year to December 2018). That's below the compensation, last year. We think total compensation is more important but we note that the CEO salary is lower, at US$3.2m. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$4.1m.
Thus we can conclude that Howard Lorber receives more in total compensation than the median of a group of companies in the same market, and of similar size to Vector Group 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.
You can see a visual representation of the CEO compensation at Vector Group, below.
Is Vector Group Ltd. Growing?
On average over the last three years, Vector Group Ltd. has grown earnings per share (EPS) by 3.5% each year (using a line of best fit). It achieved revenue growth of 3.2% over the last year.
I'm not particularly impressed by the revenue growth, but it is good to see modest EPS growth. Considering these factors I'd say performance has been pretty decent, though not amazing. You might want to check this free visual report on analyst forecasts for future earnings.
Has Vector Group Ltd. Been A Good Investment?
With a three year total loss of 30%, Vector Group Ltd. would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
We examined the amount Vector Group Ltd. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. Shareholders may want to check for free if Vector Group insiders are buying or selling shares.
If you want to buy a stock that is better than Vector Group, this free list of high return, low debt companies is a great place to look.
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If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.