In 2001 Efraim Grinberg was appointed CEO of Movado Group, Inc. (NYSE:MOV). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Efraim Grinberg’s Compensation Compare With Similar Sized Companies?
According to our data, Movado Group, Inc. has a market capitalization of US$378m, and paid its CEO total annual compensation worth US$5.5m over the year to January 2019. We think total compensation is more important but we note that the CEO salary is lower, at US$1.1m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO total compensation was US$1.7m.
Thus we can conclude that Efraim Grinberg receives more in total compensation than the median of a group of companies in the same market, and of similar size to Movado Group, 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.
You can see, below, how CEO compensation at Movado Group has changed over time.
Is Movado Group, Inc. Growing?
On average over the last three years, Movado Group, Inc. has grown earnings per share (EPS) by 32% each year (using a line of best fit). Its revenue is up 13% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Movado Group, Inc. Been A Good Investment?
With a three year total loss of 33%, Movado Group, Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at Movado Group, 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.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Shareholders may want to check for free if Movado Group insiders are buying or selling shares.
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.
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