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D. Hawkins became the CEO of Stein Mart, Inc. (NASDAQ:SMRT) in 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does D. Hawkins's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Stein Mart, Inc. has a market cap of US$37m, and is paying total annual CEO compensation of US$1.0m. (This is based on the year to February 2019). We note that's an increase of 33% above last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$620k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$452k.
As you can see, D. Hawkins is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Stein Mart, Inc. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Stein Mart has changed over time.
Is Stein Mart, Inc. Growing?
Over the last three years Stein Mart, Inc. has shrunk its earnings per share by an average of 68% per year (measured with a line of best fit). It saw its revenue drop -3.6% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Stein Mart, Inc. Been A Good Investment?
Since shareholders would have lost about 89% over three years, some Stein Mart, Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared the total CEO remuneration paid by Stein Mart, Inc., 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.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
Arguably worse, investors are without a positive return for the last three years. Notably, the CEO remuneration is actually up on last year. Some might well form the view that the CEO is paid too generously! Shareholders may want to check for free if Stein Mart insiders are buying or selling shares.
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 firstname.lastname@example.org. 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.