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Richard Hayne has been the CEO of Urban Outfitters, Inc. (NASDAQ:URBN) since 2012. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Richard Hayne's Compensation Compare With Similar Sized Companies?
Our data indicates that Urban Outfitters, Inc. is worth US$2.6b, and total annual CEO compensation was reported as US$1.0m for the year to January 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$2.0b to US$6.4b. The median total CEO compensation was US$4.9m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see, below, how CEO compensation at Urban Outfitters has changed over time.
Is Urban Outfitters, Inc. Growing?
Over the last three years Urban Outfitters, Inc. has grown its earnings per share (EPS) by an average of 17% per year (using a line of best fit). Revenue was pretty flat on last year.
This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.
Has Urban Outfitters, Inc. Been A Good Investment?
Since shareholders would have lost about 3.2% over three years, some Urban Outfitters, Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
Urban Outfitters, Inc. is currently paying its CEO below what is normal for companies of its size.
Considering the underlying business is growing earnings, this would suggest the pay is modest. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. We're not critical of the remuneration Richard Hayne receives, but it would be good to see improved returns to shareholders before the remuneration grows too much. This sort of circumstance certainly justifies further research, because the investment returns might still come in the future. Whatever your view on compensation, you might want to check if insiders are buying or selling Urban Outfitters shares (free trial).
If you want to buy a stock that is better than Urban Outfitters, this free list of high return, low debt companies is a great place to look.
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.
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