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Shareholders Will Probably Hold Off On Increasing Signet Jewelers Limited's (NYSE:SIG) CEO Compensation For The Time Being

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·3 min read
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CEO Gina Drosos has done a decent job of delivering relatively good performance at Signet Jewelers Limited (NYSE:SIG) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 25 June 2021. However, some shareholders may still want to keep CEO compensation within reason.

Check out our latest analysis for Signet Jewelers

How Does Total Compensation For Gina Drosos Compare With Other Companies In The Industry?

According to our data, Signet Jewelers Limited has a market capitalization of US$3.9b, and paid its CEO total annual compensation worth US$12m over the year to January 2021. Notably, that's an increase of 32% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.4m.

For comparison, other companies in the same industry with market capitalizations ranging between US$2.0b and US$6.4b had a median total CEO compensation of US$8.2m. Hence, we can conclude that Gina Drosos is remunerated higher than the industry median. What's more, Gina Drosos holds US$22m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2021

2020

Proportion (2021)

Salary

US$1.4m

US$1.5m

11%

Other

US$11m

US$7.7m

89%

Total Compensation

US$12m

US$9.2m

100%

Speaking on an industry level, nearly 15% of total compensation represents salary, while the remainder of 85% is other remuneration. It's interesting to note that Signet Jewelers allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

A Look at Signet Jewelers Limited's Growth Numbers

Signet Jewelers Limited's earnings per share (EPS) grew 58% per year over the last three years. In the last year, its revenue is up 9.0%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Signet Jewelers Limited Been A Good Investment?

We think that the total shareholder return of 42%, over three years, would leave most Signet Jewelers Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for Signet Jewelers (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Signet Jewelers, 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.