The CEO of G-III Apparel Group, Ltd. (NASDAQ:GIII) is Morris Goldfarb, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether G-III Apparel Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing G-III Apparel Group, Ltd.'s CEO Compensation With the industry
At the time of writing, our data shows that G-III Apparel Group, Ltd. has a market capitalization of US$734m, and reported total annual CEO compensation of US$17m for the year to January 2020. That's a slight decrease of 6.2% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.0m.
For comparison, other companies in the same industry with market capitalizations ranging between US$400m and US$1.6b had a median total CEO compensation of US$470k. This suggests that Morris Goldfarb is paid more than the median for the industry. What's more, Morris Goldfarb holds US$58m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, roughly 30% of total compensation represents salary and 70% is other remuneration. G-III Apparel Group pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
G-III Apparel Group, Ltd.'s Growth
G-III Apparel Group, Ltd. has seen its earnings per share (EPS) increase by 28% a year over the past three years. It saw its revenue drop 17% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has G-III Apparel Group, Ltd. Been A Good Investment?
With a three year total loss of 42% for the shareholders, G-III Apparel Group, Ltd. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
As previously discussed, Morris is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, we must not forget that the EPS growth has been very strong, but we cannot say the same about the uninspiring shareholder returns (over the last three years). Although we'd stop short of calling it inappropriate, we think Morris is earning a very handsome sum.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 3 warning signs for G-III Apparel Group that investors should look into moving forward.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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