James Harrison has been the CEO of Party City Holdco Inc. (NYSE:PRTY) since 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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 James Harrison’s Compensation Compare With Similar Sized Companies?
Our data indicates that Party City Holdco Inc. is worth US$894m, and total annual CEO compensation is US$2.9m. (This figure is for the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at US$1.8m. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO compensation was US$2.2m.
So James Harrison is paid around the average of the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at Party City Holdco has changed over time.
Is Party City Holdco Inc. Growing?
On average over the last three years, Party City Holdco Inc. has grown earnings per share (EPS) by 53% each year (using a line of best fit). It achieved revenue growth of 2.4% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s also good to see modest revenue growth, suggesting the underlying business is healthy. Shareholders might be interested in this free visualization of analyst forecasts.
Has Party City Holdco Inc. Been A Good Investment?
With a three year total loss of 13%, Party City Holdco Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
James Harrison is paid around what is normal the leaders of comparable size companies.
We like that the company is growing EPS, but we find the returns over the last three years to be lacking. We’d be surprised if shareholders want to see a pay rise for the CEO, but we’d stop short of calling their pay too generous. So you may want to check if insiders are buying Party City Holdco shares with their own money (free access).
Important note: Party City Holdco may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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