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Is Xcel Brands, Inc.'s (NASDAQ:XELB) CEO Salary Justified?

Simply Wall St

Robert D'Loren has been the CEO of Xcel Brands, Inc. (NASDAQ:XELB) since 2011. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. 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.

Check out our latest analysis for Xcel Brands

How Does Robert D'Loren's Compensation Compare With Similar Sized Companies?

Our data indicates that Xcel Brands, Inc. is worth US$31m, and total annual CEO compensation is US$1.9m. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$889k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$495k.

As you can see, Robert D'Loren is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Xcel Brands, Inc. 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.

You can see a visual representation of the CEO compensation at Xcel Brands, below.

NasdaqGM:XELB CEO Compensation, August 23rd 2019

Is Xcel Brands, Inc. Growing?

On average over the last three years, Xcel Brands, Inc. has shrunk earnings per share by 34% each year (measured with a line of best fit). It achieved revenue growth of 17% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over 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. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has Xcel Brands, Inc. Been A Good Investment?

With a three year total loss of 65%, Xcel Brands, Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared total CEO remuneration at Xcel Brands, Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us.

Over the same period, investors would have come away with nothing in the way of share price gains. Some might well form the view that the CEO is paid too generously! Shareholders may want to check for free if Xcel Brands insiders are buying or selling shares.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.