Roger Rawlins has been the CEO of Designer Brands Inc. (NYSE:DBI) since 2016. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Roger Rawlins's Compensation Compare With Similar Sized Companies?
Our data indicates that Designer Brands Inc. is worth US$1.7b, and total annual CEO compensation is US$4.9m. (This is based on the year to February 2018). While we always look at total compensation first, we note that the salary component is less, at US$917k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$3.7m.
It would therefore appear that Designer Brands Inc. pays Roger Rawlins more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration 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.
The graphic below shows how CEO compensation at Designer Brands has changed from year to year.
Is Designer Brands Inc. Growing?
Over the last three years Designer Brands Inc. has shrunk its earnings per share by an average of 50% per year (measured with a line of best fit). It achieved revenue growth of 13% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has Designer Brands Inc. Been A Good Investment?
Designer Brands Inc. has generated a total shareholder return of 1.9% over three years, so most shareholders wouldn't be too disappointed. But they would probably prefer not to see CEO compensation far in excess of the median.
We compared total CEO remuneration at Designer Brands Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
And shareholder returns are decent but not great. So you may want to delve deeper, because we don't think the CEO pay is too low. So you may want to check if insiders are buying Designer Brands shares with their own money (free access).
Important note: Designer Brands 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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