Should Shareholders Reconsider Weyco Group, Inc.'s (NASDAQ:WEYS) CEO Compensation Package?
The results at Weyco Group, Inc. (NASDAQ:WEYS) have been quite disappointing recently and CEO Thomas Florsheim bears some responsibility for this. At the upcoming AGM on 04 May 2021, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.
View our latest analysis for Weyco Group
How Does Total Compensation For Thomas Florsheim Compare With Other Companies In The Industry?
According to our data, Weyco Group, Inc. has a market capitalization of US$191m, and paid its CEO total annual compensation worth US$744k over the year to December 2020. We note that's a decrease of 27% compared to last year. We note that the salary portion, which stands at US$655.8k constitutes the majority of total compensation received by the CEO.
On examining similar-sized companies in the industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$192k. This suggests that Thomas Florsheim is paid more than the median for the industry. Furthermore, Thomas Florsheim directly owns US$22m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$656k | US$679k | 88% |
Other | US$88k | US$335k | 12% |
Total Compensation | US$744k | US$1.0m | 100% |
Speaking on an industry level, nearly 78% of total compensation represents salary, while the remainder of 22% is other remuneration. It's interesting to note that Weyco Group pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
Weyco Group, Inc.'s Growth
Over the last three years, Weyco Group, Inc. has shrunk its earnings per share by 39% per year. Its revenue is down 36% over the previous year.
The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Weyco Group, Inc. Been A Good Investment?
Few Weyco Group, Inc. shareholders would feel satisfied with the return of -39% over three years. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 2 warning signs for Weyco Group (1 doesn't sit too well with us!) that you should be aware of before investing here.
Switching gears from Weyco 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.
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