Is Tapestry, Inc.'s (NYSE:TPR) CEO Pay Fair?
Victor Luis has been the CEO of Tapestry, Inc. (NYSE:TPR) since 2014. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Tapestry
How Does Victor Luis's Compensation Compare With Similar Sized Companies?
Our data indicates that Tapestry, Inc. is worth US$7.6b, and total annual CEO compensation is US$13m. (This number is for the twelve months until June 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.4m. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$6.9m.
Thus we can conclude that Victor Luis receives more in total compensation than the median of a group of companies in the same market, and of similar size to Tapestry, Inc.. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Tapestry has changed from year to year.
Is Tapestry, Inc. Growing?
Over the last three years Tapestry, Inc. has grown its earnings per share (EPS) by an average of 9.4% per year (using a line of best fit). In the last year, its revenue is up 8.5%.
I'd prefer higher revenue growth, but I'm happy with the modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. It could be important to check this free visual depiction of what analysts expect for the future.
Has Tapestry, Inc. Been A Good Investment?
Since shareholders would have lost about 27% over three years, some Tapestry, Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
We examined the amount Tapestry, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Although we'd stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. Shareholders may want to check for free if Tapestry insiders are buying or selling shares.
If you want to buy a stock that is better than Tapestry, this free list of high return, low debt companies is a great place to look.
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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.
