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Should You Worry About La-Z-Boy Incorporated's (NYSE:LZB) CEO Pay?

Simply Wall St

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Kurt Darrow has been the CEO of La-Z-Boy Incorporated (NYSE:LZB) since 2003. 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.

View our latest analysis for La-Z-Boy

How Does Kurt Darrow's Compensation Compare With Similar Sized Companies?

According to our data, La-Z-Boy Incorporated has a market capitalization of US$1.5b, and pays its CEO total annual compensation worth US$4.4m. (This figure is for the year to April 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$990k. 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$4.1m.

So Kurt Darrow receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see a visual representation of the CEO compensation at La-Z-Boy, below.

NYSE:LZB CEO Compensation, July 2nd 2019

Is La-Z-Boy Incorporated Growing?

On average over the last three years, La-Z-Boy Incorporated has grown earnings per share (EPS) by 4.3% each year (using a line of best fit). Its revenue is up 10% over last year.

I would argue that the modest growth in revenue is a notable positive. And the modest growth in earnings per share isn't bad, either. Although we'll stop short of calling the stock a top performer, we think the company has potential. Shareholders might be interested in this free visualization of analyst forecasts.

Has La-Z-Boy Incorporated Been A Good Investment?

With a total shareholder return of 20% over three years, La-Z-Boy Incorporated shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Kurt Darrow is paid around the same as most CEOs of similar size companies.

We see room for improved growth, as well as fairly unremarkable returns over the last three years. But we don't think the CEO compensation is a problem. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling La-Z-Boy (free visualization of insider trades).

Important note: La-Z-Boy 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.

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.