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Shareholders May Not Be So Generous With Vector Group Ltd.'s (NYSE:VGR) CEO Compensation And Here's Why

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Performance at Vector Group Ltd. (NYSE:VGR) has been reasonably good and CEO Howard Lorber has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 03 June 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Vector Group

How Does Total Compensation For Howard Lorber Compare With Other Companies In The Industry?

At the time of writing, our data shows that Vector Group Ltd. has a market capitalization of US$2.2b, and reported total annual CEO compensation of US$16m for the year to December 2020. Notably, that's an increase of 35% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$3.4m.

On examining similar-sized companies in the industry with market capitalizations between US$1.0b and US$3.2b, we discovered that the median CEO total compensation of that group was US$3.2m. Accordingly, our analysis reveals that Vector Group Ltd. pays Howard Lorber north of the industry median. Moreover, Howard Lorber also holds US$72m worth of Vector Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2020

2019

Proportion (2020)

Salary

US$3.4m

US$3.3m

21%

Other

US$12m

US$8.4m

79%

Total Compensation

US$16m

US$12m

100%

Talking in terms of the industry, salary represented approximately 28% of total compensation out of all the companies we analyzed, while other remuneration made up 72% of the pie. Vector Group pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

A Look at Vector Group Ltd.'s Growth Numbers

Over the past three years, Vector Group Ltd. has seen its earnings per share (EPS) grow by 11% per year. In the last year, its revenue is up 11%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Vector Group Ltd. Been A Good Investment?

Vector Group Ltd. has generated a total shareholder return of 10.0% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 4 warning signs for Vector Group you should be aware of, and 2 of them are a bit unpleasant.

Switching gears from Vector Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.