Patrice Jean Louvet became the CEO of Ralph Lauren Corporation (NYSE:RL) in 2017. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. 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 Patrice Jean Louvet's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Ralph Lauren Corporation has a market cap of US$8.9b, and reported total annual CEO compensation of US$14m for the year to March 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.3m. 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 examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$6.4m.
Thus we can conclude that Patrice Jean Louvet receives more in total compensation than the median of a group of companies in the same market, and of similar size to Ralph Lauren Corporation. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Ralph Lauren has changed over time.
Is Ralph Lauren Corporation Growing?
On average over the last three years, Ralph Lauren Corporation has grown earnings per share (EPS) by 69% each year (using a line of best fit). In the last year, its revenue is up 1.8%.
This demonstrates that the company has been improving recently. A good result. It's also good to see modest revenue growth, suggesting the underlying business is healthy. It could be important to check this free visual depiction of what analysts expect for the future.
Has Ralph Lauren Corporation Been A Good Investment?
Boasting a total shareholder return of 41% over three years, Ralph Lauren Corporation has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
We compared total CEO remuneration at Ralph Lauren Corporation with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. So you may want to check if insiders are buying Ralph Lauren shares with their own money (free access).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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