Thomas Florsheim became the CEO of Weyco Group, Inc. (NASDAQ:WEYS) in 1999, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Thomas Florsheim Compare With Other Companies In The Industry?
According to our data, Weyco Group, Inc. has a market capitalization of US$157m, and paid its CEO total annual compensation worth US$1.0m over the year to December 2019. Notably, that's a decrease of 19% over the year before. We note that the salary portion, which stands at US$679.0k constitutes the majority of total compensation received by the CEO.
On examining similar-sized companies in the industry with market capitalizations between US$100m and US$400m, we discovered that the median CEO total compensation of that group was US$219k. This suggests that Thomas Florsheim is paid more than the median for the industry. What's more, Thomas Florsheim holds US$18m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 45% of total compensation represents salary, while the remainder of 55% is other remuneration. Weyco Group pays out 67% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Weyco Group, Inc.'s Growth
Over the last three years, Weyco Group, Inc. has shrunk its earnings per share by 21% per year. Its revenue is down 18% over the previous year.
Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Weyco Group, Inc. Been A Good Investment?
With a three year total loss of 34% for the shareholders, Weyco Group, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
As we noted earlier, Weyco Group pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Weyco Group that investors should think about before committing capital to this stock.
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.
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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