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Should You Worry About G-III Apparel Group, Ltd.'s (NASDAQ:GIII) CEO Pay?

Simply Wall St

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Morris Goldfarb is the CEO of G-III Apparel Group, Ltd. (NASDAQ:GIII). 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for G-III Apparel Group

How Does Morris Goldfarb's Compensation Compare With Similar Sized Companies?

Our data indicates that G-III Apparel Group, Ltd. is worth US$1.3b, and total annual CEO compensation is US$18m. (This is based on the year to January 2019). That's a notable increase of 61% on last year. We think total compensation is more important but we note that the CEO salary is lower, at US$1.0m. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$4.1m.

As you can see, Morris Goldfarb is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean G-III Apparel Group, Ltd. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

The graphic below shows how CEO compensation at G-III Apparel Group has changed from year to year.

NasdaqGS:GIII CEO Compensation, June 16th 2019

Is G-III Apparel Group, Ltd. Growing?

On average over the last three years, G-III Apparel Group, Ltd. has grown earnings per share (EPS) by 17% each year (using a line of best fit). It achieved revenue growth of 7.2% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.

Has G-III Apparel Group, Ltd. Been A Good Investment?

Since shareholders would have lost about 42% over three years, some G-III Apparel Group, Ltd. shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We compared the total CEO remuneration paid by G-III Apparel Group, Ltd., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. However, the returns to investors are far less impressive, over the same period. So shareholders might not feel great about the fact that CEO pay increased on last year. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at G-III Apparel Group.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.